Skip to main content

The Globe and Mail

Microsoft introduces Slack rival to lure business-chat users

Microsoft Corp. has unveiled a corporate team-chat service that works with its cloud-based Office and Skype products, aiming to take on Slack Technologies Inc. and Atlassian Corp.'s HipChat in a growing market.

The new product is "designed to facilitate real-time conversations and collaboration while maintaining and building up that institutional knowledge of a team," said chief executive officer Satya Nadella. The product has team chat, private messages and voice and videoconferencing.

Big companies like Microsoft and IBM are showing renewed interest in the corporate-messaging market as customers flock to Internet-based tools like Slack for setting up team communications, said Vanessa Thompson, an analyst at IDC. Microsoft relied on Office 365 and other products to rack up almost $10-billion (U.S.) in commercial cloud revenue for the fiscal year that ended June 30, and is adding services to draw in more customers.

Story continues below advertisement

"Microsoft is trying to get more airtime with customers that might want something to augment their existing investment in Office 365," Thompson said. "What we have started to see is a bunch of companies trying to attack the enterprise versions of WhatsApp and consumer messaging." IDC hasn't published a market size or forecast for the space, which it calls workplace application messaging.

A preview of the service, dubbed Microsoft Teams, is available now for Office 365 commercial customers in some versions. It will be generally available in the first quarter and will be included in all Office 365 Enterprise and small-business versions.

Microsoft's product allows teams to add what it's calling Tabs, to quickly link to frequently used files and applications. These tabs can relate to Microsoft products like the OneNote note-taking program or to outside products – the company said it's adding support for Zendesk and Asana soon. Teams can also bring in notifications from services like Twitter and GitHub. Like Slack, it also supports the usage of bots – programs that chat with users to automate tasks.

It's not Microsoft's first foray into this area – the company paid $1.2-billion in 2012 to buy Yammer Inc., but hasn't been able to build up the kind of usage as Slack and HipChat. Slack raised $200-million at a valuation of $3.8-billion in April. The startup, which introduced its product in 2013, said it reached annualized revenue of $100-million over the summer and surpassed 1.25 million paid users. HipChat was founded in 2010 and acquired by Atlassian two years later. That company declined to break out specific numbers for the product.

Redmond, Wash.-based Microsoft considered acquiring Slack, but the discussions never got serious enough to involve Nadella or the company's board, and it opted instead to build its own similar software, said two people familiar with the matter, who asked not to be named because the process wasn't public. TechCrunch reported Microsoft's potential interest in Slack in March.

In a very tongue-in-cheek acknowledgment of the competition, Slack took out a full-page ad in the New York Times Wednesday and posted a copy on its website welcoming Microsoft to the field and noting that "all this is harder than it looks."

Bloomberg Beta, the venture capital arm of Bloomberg LP, is an investor in Slack.

Story continues below advertisement

Report an error
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.