When it comes to office collaboration tools, we’ve all heard how Slack is the cool kid.
You probably know Slack fairly well, or at least its archetype: Slack is the guy riding his bike to work in skinny jeans. You’ll never see Slack at a traditional gym because Slack is doing crossfit several times a week. Slack has either a large, fashionably-bushy beard or just the right amount of shadowy stubble. And when it’s time to unwind, Slack drinks artisan microbrews, probably brewed Belgian-style with just a hint of citrus.
Analogies aside, Slack is incredibly popular in digital agencies, start-ups and other businesses. Surely — somewhat cynically, and almost certainly by design — Slack is the cool kid. And having recently announced another round of funding ($427 million) raising its valuation to $7.1 billion, this cool kid clearly has some depth.
But guess what? The cool kids almost always grow up, and growing up means a certain level of pragmatism.
And “pragmatism” is the best one-word rationale behind the inevitable victory of Microsoft Teams in the so-called collaboration wars.
Decoding Slack vs. Teams Feature Parity
When considering the head-to-head future of these platforms, the first thing to address is the features. Much is made of how Slack compares with Teams from a feature perspective. More than one analyst can be found extolling the virtues of Slack’s supposed advantage here. Dig a little deeper, though, and that would-be advantage clearly depends on context. As Obi-Wan Kenobi would say, what they tell you is true … from a certain point of view. From any other perspective, though, Darth Vader is still Anakin Skywalker, and Slack and Teams are essentially in a state of feature parity.
Many feature-to-feature comparisons knock Teams down because Slack offers document imaging, document indexing, mobile integration, single sign-on and others. One incredibly important common factor that doesn’t get called out in these comparisons, however: Those are all components baked into the wider Office 365 platform, of which Teams is a fully-integrated part.
That’s right: Use Teams as part of your Office 365 license, and Slack’s supposed feature advantage is wiped out. So with a level playing field in features, what makes Teams a better bet for the future? It’s that selfsame relationship with Office 365.
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The Teams Advantage: Enterprise Footprint, Integration and Security
Microsoft’s foothold in the enterprise has never been stronger, and the bedrock of that enterprise presence is Office 365. Over the past decade challenges from competitors, such as IBM Notes or Google's G-suite, never fully materialized. Outlook, Skype, Word, PowerPoint, Excel and their various lesser-known cousins have become the de facto standard for getting work done in the business world. Teams is the most promising of those younger cousins — and it’s that family connection that bodes so well for Teams.
Integration with Office 365 means your identity moves seamlessly across the Office cloud, pulling Outlook and Office functionality directly into Teams (and vice versa). Schedule a Teams conference call directly from an email? Not a problem. Send Teams notes directly into OneNote for in-context logging and follow-up? Easy. Store Teams documents in a SharePoint library for all of the metadata, workflow and retention you can ask for in any highly-regulated environment? It’s right there, out of the box.
Security, too, is a much stronger play for Microsoft than for Slack. Slack is not a security company: it makes one collaboration product. With the Enterprise Mobility and Security suite that comes attached to Office 365, meanwhile, Microsoft makes true enterprise-class security available for the data that’s stored within Teams (and the rest of its platform). That isn’t the only area Microsoft beats Slack with scale, either.
Slack has an enterprise license available, but can you really see Slack investing billions in security the way Microsoft does in its own cloud? Microsoft’s data centers are a truly global proposition, hosting the information of the world’s largest and most valuable companies — and governments. Its physical imprint is truly worldwide in scope, allowing Microsoft solutions to meet regional compliance issues in ways even Amazon currently can’t.
Given that, how exactly does Slack intend to prosper in law firms, banking institutions, insurers, healthcare providers and other organizations where data privacy and regulatory compliance are deal breakers? I don't see Slack getting far in the real world of the enterprise. But if you don’t trust me, maybe we should trust history.
Freemium Licensing Is the Killer App
It may be all the rage of late to ignore the lessons of history, but this is one place where Slack had best beware. I name-checked Lotus Notes before, but who can even remember its chunky UI? What about the Domino database and the specialized skills it required to administer and roll out to project teams? Maybe Newsgator, the SharePoint-based social network application that was all the rage as recently as 2012?
All of these collaboration tools have one thing in common: They were briefly in vogue before a Microsoft product with freemium licensing grew like a weed and choked them out. Lotus and Domino fell to Windows SharePoint Services, or WSS, which spread like wildfire (and often with similar governance challenges) throughout the enterprise. Newsgator offered an independent product that provided a significant upgrade over SharePoint itself — for a premium cost. Once Yammer was acquired and haphazardly baked into Office 365, nobody saw much point to paying that premium price.
At the end of the day, the technology that makes an organization run will be managed (and usually owned) by IT. And despite efforts by various CIOs to make over their IT units as centers of innovation, technology remains an operational necessity — and an operational cost. In other words, IT is a cost center, and budget will always be king. In truly cost-conscious organizations, Slack won’t be able to compete with a basic freemium license from Teams. Meanwhile, the pay-for-premium, best-of-breed mentality that drives the purchasing decisions Slack benefits from in small environments doesn’t fly in the bottom-line world of the enterprise. There, the Office 365 license bundle that includes Teams’ enterprise edition will remain the best buy for IT departments.
In other words, even if Teams didn’t have feature parity and even if Microsoft didn’t offer a richer, more integrated platform environment with Teams as part of Office 365, Microsoft should still win on cost. And that’s got to be a pretty daunting proposition for anyone considering Slack outside small-group use cases where a creative team demands it (a.k.a. the “Mac Effect”).
Tomorrow Never Knows (But Yesterday Can Make an Informed Guess)
Naturally, all of this is speculation, but it’s speculation well-informed by the past. When you’ve seen the hype cycle through a few times, the pattern becomes increasingly familiar — and there’s no doubt Slack is riding a wave of hype today.
In order to have a meaningful conversation with a CIO about the modern digital workplace, you do need to address the question of Slack and Teams. These platforms are where collaboration is happening, and they will only grow more popular. Unfortunately for Slack, there’s very little that it does that Teams can’t do today (or won’t do soon). It lacks both the built-in integrations and even more importantly, the security bona fides that the Microsoft cloud brings to the table.
Finally, and perhaps most importantly to the future-minded C-suite, even after the hullaballoo of its latest round of funding, Slack simply doesn’t have access to the sort of money that Microsoft throws into the competitive battles it decides to win. Maybe Salesforce, Oracle or even Amazon will snap it up and changes the picture, but the way things stand today, Teams will soundly drub Slack in the enterprise. And before you know it those skinny jeans will get traded in for a nice pair of comfortable, inoffensive chinos that also allow for persistent chat, high definition audio/video, note-taking and all the other things that make collaboration so much easier. Things Microsoft Teams does just as well.
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