tug of war
PHOTO: toffehoff

Microsoft's recent announcement about a free version of Teams set the industry abuzz in a new round of Slack versus Microsoft Teams rivalry. Following the announcement, a spate of industry reviews appeared, which either focused on a features comparison between the two products or an appraisal of the varying breadth and depth of integration with third-party apps.

The uniformity of the industry response is surprising, considering it completely missed the point. What we are seeing is the latest iteration of a continuous pattern of ongoing competition between Microsoft and, well ... everybody else vying for business productivity dollars in the enterprise market.

Can't Have a Race With One Horse

To see what this rivalry is really about, consider the following:

At the end of 2017, Microsoft announced it had 120 million commercial Office 365 users, and expected two-thirds of Office customers to be using cloud-based Office 365 by fiscal 2019.

By contrast, in May 2018 Slack announced it had 8 million "daily active users," across 500,000 organizations, and of those, 3 million were paying users. 

In terms of market penetration, it is obvious that Slack, despite the enormous buzz and head start of several years, is already far behind Microsoft, with its still immature Teams offering. Even though a recent survey by my company, harmon.ie, found only 16 percent of Office 365 users naming Microsoft Teams as one of their three top Office Apps, this percentage translates to an enormous user base. And this number will clearly grow over time as Microsoft Teams picks up momentum (and new features).

When you look at the competition this way, it doesn’t seem like much of a horse race after all, does it? 

Related Article: Will Microsoft Teams Hammer Yammer?

Rehashing the Best of Breed vs. Product Suite Debate

This is classic Microsoft strategy. When a competitor comes up with a compelling new product, Microsoft either tries to buy the product (which Microsoft reportedly tried to do with Slack) or it releases a preliminary version of a similar product. Past examples include Internet Explorer (to compete with Netscape) and OneDrive for Business (to compete with Dropbox), to name but two. In both of these cases, Microsoft released a product that didn’t initially measure up to the competitor’s offering, but with a promise of “it’ll get better.” 

When faced with this choice, people take notice — or at the very least, take pause. What many people do is sit on the fence to see how things develop. Over time, Microsoft’s product improves, eventually becoming "good enough" to match the competition, at which point the bulk of the market decides to opt for Microsoft. The choice is even simpler when a comparable Microsoft product is included with their existing Office 365 license, or they simply get it for free (as with the recent free Microsoft Teams announcement).

This market dynamic is not unique to Microsoft. It’s the classic "best of breed" versus "product suite" situation. The product suite, in this case, Office 365, doesn’t need to provide the best features, the best third party integration, or even the biggest partner ecosystem to win, because most organizations crave the single product solution that the suite provides: one license, one support contact, and (eventually) one smooth user experience.

So while Teams still has a long way to go before it is truly integrated into the Office 365 stack, for many Microsoft users, it is either "good enough" today, or it will eventually be "good enough." And that’s what dictates their product selection.

Related Article: Office 365 Is Primed to Pick Up the ECM Pieces

Slack vs. Teams: Which Is the One for You?

In a product suite versus best of breed competition, product suite advantages include price bundling, uniform user experience, and a single "throat to choke" for customer support. The advantage of the best of breed product is exceptional features for a specific task or set of tasks. When a best of breed product is first to market, it needs to either grab extraordinary market share quickly, or it needs to add additional capabilities before the competition catches up.

This is precisely why Slack is vying to become a software platform, by extending its capabilities through integration with partner products. It’s no wonder Slack touts its 1,500 product integrations and the 200,000 third party developers who are building integrations with its base product. By connecting to many web services, including many services not supported by Microsoft, Slack hopes to become a leading multi-vendor platform for office productivity. 

Related Article: Slack vs. HipChat vs. Yammer

The Real Teams vs. Slack Story

Based on this analysis, if your organization relies upon many non-Microsoft web services, Slack might be the way for you to go.

On the other hand, if Microsoft forms the core of your organization’s IT stack, then it makes sense to standardize on Microsoft Teams, even if it doesn’t have all the bells and whistles of Slack.

It’s easy to predict that many of the 120 million Office 365 users won’t adopt Slack — or any other third party product — when they already have an equivalent offering baked into Office 365. Sure, some users will adopt Slack because they like its interface, or because they already built collaboration groups using it, or because they need integration to a product or service not (yet) supported by Microsoft, but these numbers will be relatively small.

This is the real Microsoft Teams versus Slack story. It’s not about features or functions: it’s the same old story we’ve already seen a million times. Just ask Netscape … or Dropbox.