Slack sets sights on Microsoft with new enterprise edition

By on
Slack sets sights on Microsoft with new enterprise edition

Expands beyond teams to entire organisations.

Messaging and collaboration software start-up Slack is making a strong push to expand its business by selling technology to some of the largest corporations in the country.

Slack on Tuesday unveiled a new product designed for companies with hundreds of thousands of employees and strict compliance requirements. It has already signed up IBM, PayPal, and Capital One to its new Enterprise Grid product.

The development marks a striking evolution for a four-year-old messaging platform that started out as a tool used by a handful of entrepreneurs and was quickly adopted by media companies and startups.

Slack is a platform where employees can send messages, collaborate, organise and share files. The technology also integrates with a wide variety of business software - such as and Skype - so employees can do all their work within Slack.

The technology had been designed for teams or small groups of employees.

But with additional security and regulatory approvals, Slack can now sell its enterprise product to big financial and health care companies, said Noah Weiss, who heads Slack's search, learning, and intelligence group. IBM, Capital One and PayPal have been using it for months.

Slack also today announced a new partnership with SAP that will see the technology giant build a portfolio of bots for its Concur, SuccessFactors, and HANA platforms to integrate with Slack.

Andrew Braccia, a partner at Accel Partners who provided Slack's first venture investment, said Slack's big business strategy is "just a very natural progression of the company."

"It worked for 50 people, and it scaled up to working for thousands if not tens of thousands of people," Braccia said.

The new product provides another line of revenue for Slack, which was valued at US$3.8 billion at its last private financing round a year ago. The company has raised more than US$500 million from venture capitalists.

Slack is projecting about US$150 million in annual revenue, Weiss said, based on its most recent monthly revenue. Its customers include 38,000 paying companies.

Slack started as a messaging system that co-founder and CEO Stewart Butterfield used to collaborate with colleagues as they built a gaming company, Glitch, which never took off.

But Slack faces formidable competition in Microsoft, which last year unveiled its Teams workplace collaboration service, and Facebook, which launched Workplace by Facebook.

And there are ample other technology companies, from Atlassian to Google, which offer similar services.

A recent survey by Spiceworks, a network of IT professionals, found that Microsoft Teams will surpass Slack in popularity among businesses. About 27 percent of large businesses are already using or plan to use Teams within two years, compared with 18 percent using Slack.

Since most big companies already use Microsoft, it is easier and cheaper to stick with Microsoft's chat option, said Spiceworks analyst Peter Tsai.

"Essentially they [Slack] are competing against a free product," Tsai said

Got a news tip for our journalists? Share it with us anonymously here.

Most Read Articles

Log In

  |  Forgot your password?