Can Slack Really Compete with Microsoft in Collaboration?
PHOTO: Giorgio Minguzzi

Slack will be slow to lure customers away from other collaboration vendors until it improves data hosting, search, partner collaboration and other enterprise features, analysts and Slack users told CMSWire.

But it's off to a strong start.

The San Francisco-based messaging platform released an enterprise edition at an event in its hometown on Tuesday, a “really good move that makes Slack more of a platform versus a collaborative application,” said Gartner’s Mike Gotta, research vice president for collaboration and social software. 

“If you are an enterprise architect, a CIO or a CTO, security, policies and administration are the things that help you sleep at night."

Slack Enterprise Grid offers enhancements built specifically for large companies, including security, compliance with FINRA and HIPAA, e-discovery functionality, sharing across multiple teams, one infrastructure layer, centralized controls, enterprise-wide search, unlimited workspaces and data-loss prevention.

Microsoft Ready?

Enterprise ready? Yes. Ready to take on Microsoft Teams? Not quite.

Microsoft has a huge edge in adoption. Kirk Koenigsbauer, corporate vice president for the Office 365 client apps and services team wrote in a blog on Monday, 30,000 organizations across 145 markets and 19 languages have actively used Microsoft Teams in the previous month. 

Microsoft debuted the chat-based collaboration tool for Office 365 in November 2016. 

Slack, by comparison, reports the number of Enterprise Grid users is in the dozens and includes companies like PayPal, Capital One and IBM.

In his blog post, Koenigsbauer indicated the general release of Teams would be some time this quarter. He also noted the enterprise traction Teams has gained, 

“Not only does it show that the product fills a real market need, but it gives us a ton of information to help shape the product leading up to General Availability, which is still on track for this current quarter, Q1 2017.”

Slack Enterprise Grid
Slack Enterprise Grid

Slack Plays a Game of Catch Up

Ed Sim, venture capital investor and founding partner at New York City-based boldstart ventures, questions the Microsoft adoption numbers. If a "huge company" with a $20 million Microsoft contract includes departments that don't use Teams, does that count? 

“Slack does have an opportunity here but it has to move quickly and launch those features companies want,” Sim said. “And at some point they may have to look at hosting on-premises if they’re ever going to get there. You have a host of companies that need their own control over data where it’s located.”

International companies will worry about where their data is stored, Gotta noted, and “may be concerned about US-only data options.” Slack could also improve the way brands collaborate with third parties. 

Slack utilizes an Amazon Web Services (AWS) data center in the US, which serves all customers, including the 40 percent of paid customers outside the US. Slack has 1.5 million-plus paying customers.

Microsoft Teams
Microsoft Teams

A Disruptor Among the Giants

Rob Bellmar, executive vice president of business operations at Omaha, Neb.-based West Unified Communications Services, said Slack has challenged business leaders and IT teams to rethink the way they collaborate across different platforms while achieving ROI through adoption. 

However, Microsoft still has an edge, he said, because it remains a leader in providing organizations with the complete collaboration package: serving as organizations’ one-stop-shop for secure and efficient productivity tools.  

“Though Slack has made strides by rolling out features like video integration, document sharing and threaded messaging, it’s still viewed as a disruptive provider in the market when compared to collaboration giants like Microsoft and Cisco,” Bellmar told CMSWire. “Microsoft is a long-standing collaboration provider for enterprise-level organizations, and I don’t anticipate these IT departments jumping ship for Slack just yet.”

Slack Integration Edge

Mike Gotta
Mike Gotta

This doesn’t mean Slack has zero advantages over Microsoft. Slack has made significant investments in integrations, Gotta said. 

It has 900 app integrations, most notably with IBM Watson, Salesforce and a just-announced SAP connection which includes integrations across HANA Cloud Platform, SuccessFactors and Concur. The capabilities include real-time reporting and feedback on performance goals and message-based expense and travel management.

Gartner’s Gotta sees integrations with Watson, Salesforce and SAP as differentiators for Slack. He also called them “strategic relationships with larger platforms.”

Microsoft promised more than a hundred Office 365 connectors at the time of the Teams launch but, “hasn’t been clear as to how it’s going to work and what the status is.” Microsoft’s latest on connectors is here

Microsoft announced this week that the GA of Teams will also deliver WhoBot, a bot which identifies expertise in the organization. Teams will also be getting new compliance and reporting capabilities in the coming weeks to protect data and documents.

High Marks for Search

Constellation Research analyst Alan Lepofsky called Slack Enterprise Grid “extremely well thought out” for enterprise needs, noting that it provides IT with the administrative controls it requires without impacting the user experience.

Alan Lepofsky
Alan Lepofsky

Lepofsky also gave high marks to Slack’s creation of a “Search Learning and Intelligence” (SLI) team which is supposed to "make it easier for people to find the content and colleagues they need."

If Lepofsky had to pick an area where Slack still needs to improve, “it can still feel a bit techie, in that slash commands and bots are not completely intuitive to everyone,” he said, adding that templates for use cases and task management functions might make nice additions.

Slack Customer: Improve Search, Threads

How do customers rate Slack? We caught up with one person who feels Slack, while great at real-time communication, needs improvements with managing conversations.

Ethan Kravitz, co-founder and CTO of Overnight, said Slack is best for "lightweight collaboration" and for other communications where answers are important, but arriving at that answer "can be treated as ephemeral." 

"As they try to scale beyond real-time chat," Kravitz said, "I haven't felt like they added a ton of value. That is why I don't like Slack threads

"If all of the historical context of a discussion is important, such as product requirements, then it's probably best to distill the key points from the discussion and store them in Word, Google Docs, Notion or something similar. These are much better suited for permanent knowledge storage than Slack threads."

In order to compete with Microsoft, Slack must "majorly improve search." Tuesday's announcement did include news of new cross-enterprise search capabilities.

"If something is not time sensitive and can be discussed asynchronously, I'd honestly rather do it over email," Kravitz said. "We use Google Apps at Overnight, and no one does search better than Google. There is nothing I can't go back and find in my email. In Slack I feel like I can only find about 30 percent of things I have a vague recollection of."

Team Transparency

Slack needs to approach permanent collaboration and knowledge storage in a different paradigm, rather than tack it onto the existing Slack interface, he added.

"There is a reason Box, Dropbox, Salesforce (Quip) and others are all investing heavily in this space with new products," Kravitz said.

Slack user Michael Flores, a software engineer with the systems and technology divisions at Macy's, hailed Slack Enterprise Grid as an "interesting way to bring more transparency across teams and give enterprises the ability to organize their Slack teams however fits best."

"The biggest draw of Slack," he added, "has been in taking information from the silo of email chains to a space where anyone can get the information they need, in theory."

Competitors: You’re Too Late, Slack

Slack competitors did not miss the chance to weigh in on Slack’s foray into the enterprise.

David Puglia, chief marketing officer at Jive, said apps like Slack capture "micro communications," but today’s enterprises require a "more holistic solution for bringing together disparate work streams and aligning organizations across departments and teams." 

"We see companies all around the world dealing with fragmentation and silos from geographic, cultural and generational differences," he said, "which is why Jive has always taken a hub approach to collaboration, as opposed to focusing on conversations alone." 

Steve Goldsmith, general manager of another Slack competitor, Atlassian HipChat, told CMSWire that Slack Enterprise Grid is "about 18 months late."

He noted it was announced in 2015, then promised for delivery in early 2016 and that there still isn’t any pricing information available. A Slack media official said the company is not disclosing pricing. Companies interested in the enterprise product can learn more by contacting Slack directly. 

Goldsmith also called Slack’s enterprise features “an afterthought” in comparison to HipChat’s, which were built for business from the ground up.

But it’s not just Slack’s go-to-market strategy where Goldsmith finds fault. 

“It doesn’t really solve a problem,” he said. “There’s a lot of noise and very little signal.”

Employee Experience Key

Richard Edwards
Richard Edwards

Who will win this year in enterprise collaboration? Ultimately, those companies offering a whole host of systems, including email, file sharing, planning, meetings, HR, accounting systems, CRM, ERP, software configuration management, etc., according to Richard Edwards, principal research analyst at London-based Ovum Research.

"This is when other propositions present greater appeal," he said.

Gartner's Gotta said collaboration platforms need a "renaissance" in terms of "understanding employee experience."

“They need to do it with personas, journey mapping or some type of user experience design," Gotta said. "How many times have we stood up SharePoint only to find out everyone hates it? (Vendors) need more guidance and insight from customers to see what their particular teams face."

Paul Miller, CEO and founder of strategic partner and boutique consultancy Digital Workplace Group (DWG), questioned if Slack would achieve what Google for Work "failed to do and break through the 'glass ceiling' to gain a real foothold within the larger enterprises."

"Not sure with Slack," Miller said. "It has been rolled out well in some cases but mainly as an extra layer of functionality rather than a full replacement service."