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Slack still seen as leader in team communication apps market

Facing growing pressure from Microsoft and Cisco, Slack is expected to remain competitive in the team communication apps market because of its loyal customers and strong reputation.

Despite the growing competition from platforms like Microsoft Teams and Cisco Spark, Slack is in a strong position...

to continue winning customers over the next several years because of its mature product, loyal customer base and reputation as a leader in the team communication apps market.

Released in 2013, Slack revolutionized the way millions of workers get work done through its teams-based platform for persistent instant messaging. The platform was so successful that virtually all unified communications vendors -- and scores of startups -- released or acquired their own workstream collaboration platforms in response. Even consumer giants like Amazon and Facebook have entered the emerging market.

Competitor vendors like Microsoft, Cisco and Avaya will be able to work with large legacy customer bases to drive top-down adoption of their team communication apps. Slack, in contrast, will continue to rely heavily on the bottom-up approach that fueled its initial success, according to the vendor's CTO and co-founder, Cal Henderson.

"We definitely wouldn't see the success we've seen on the enterprise sales side without initial grassroots adoptions," Henderson said in an interview with TechTarget. "And I think we're going to continue to use that as a way for people to get into the product."

More than 150 organizations have deployed Enterprise Grid, Slack's beefed-up offering for large enterprises, including several big names such as 21st Century Fox, Target, Capital One and IBM. Nearly all of those customers chose Slack after small groups within the organization downloaded it and got hooked on the freemium version, Henderson said.

A young, crowded team communication apps market

At least 100 vendors now offer workstream collaboration products that in some way attempt to bring together synchronous and asynchronous communications, said Adam Preset, an analyst at Gartner. The relatively new market will take years to mature and consolidate, positioning Slack to remain a significant player for the foreseeable future, he said.

"Because Slack has brought a lot of visibility to this market, and a lot of technical leadership, they will continue to be perceived as a very solid solution in the market," Preset said, calling Slack the "poster child" for team collaboration.

Slack, which now has six million daily active users and a valuation of $5 billion, will have to compete with the offerings of established UC vendors, such as Microsoft Teams, Cisco Spark, Avaya Zang and Unify Circuit. The makers of those products have recently stepped up efforts to drive adoption of their team communication apps.

Microsoft is forcing Skype for Business users to transition to Teams, which is available as part of Office 365, while Cisco has complemented its Spark offering with the Spark digital whiteboard. Avaya, meanwhile, announced last week it would integrate Zang with its desktop client for VoIP phones.

Slack also faces pressure from pure cloud UCaaS vendors like RingCentral, which sells Glip, and startups with apps targeted at specific verticals. Symphony, for example, has security features in its namesake product that appeal to the financial services industry.

"This market is just starting out. There is no dominant vendor at the moment," said Alan Lepofsky, a principal analyst at Constellation Research Inc., based in Cupertino, Calif. "Overall think of it as similar to the enterprise file-sharing market, where stand-alone vendors raised awareness, and then large vendors followed, yet there is still a place for both."

It's relatively easy to clone something that looks like Slack without it having the same benefits.
Cal HendersonCTO and co-founder, Slack

Slack's Henderson referred to new competitor platforms like Microsoft Teams as Slack "clones." Many of these vendors are selling to CIOs, bundling their team communication apps with other UC offerings, whereas Slack has always focused on making a product attractive enough to be spread organically by word of mouth, Henderson said.

Slack also has the advantage of four years of feedback from a loyal base of customers, many of whom first started using the app in their personal lives among family and friends.

"It's relatively easy to clone something that looks like Slack without it having the same benefits," Henderson said. "We make one thing, and we pour all of our efforts into making it the best possible product."

Slack to prioritize integrations over native features

Slack offers basic voice and video calling, but Henderson said he didn't expect the company would invest heavily in expanding its platform to natively include more robust UC features -- even as Microsoft and Cisco look to enhance their calling capabilities.

"We realize that we will never be as good at providing voice and video calling as a company that just does that," Henderson said. "What we're looking to do is make sure we provide the surface area in Slack such that those things [customers] are already using can integrate really tightly."

Rather than build out task tracking or project planning capabilities, for example, Slack prefers value-added integrations with platforms like Jira and Zendesk, he said.

Prioritizing integrations over native features is an interesting gamble, said Wayne Kurtzman, an analyst at IDC. It appears to be a smart move given the current state of the cloud communications market, although that could change in the future, he said.

The video conferencing market is still highly fractured, for example, and many enterprises would probably prefer to integrate their favorite platforms into Slack rather than be forced to use new meetings software.

With nearly 1,000 integrations available in its app store, Slack has a leg up on the rest of the market. But competitors are catching up, and Slack knows it won't be able to maintain its advantage forever, Kurtzman said. Microsoft Teams rolled out an app store in January.

It's safe to assume Slack has a longer-term plan, Kurtzman said. "It just may be as unique as the original Slack product was in changing how people work," he said. "If I had a unique view I probably wouldn't be talking loudly about it either."

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