The Workplace Operating System War

We are in the middle of the rise of a new operating system. It’s being driven primarily by millennials and the shift to remote work — accelerated by COVID-19. Two clear winners have emerged, and Slack and Microsoft Teams have created a duopoly of workplace operating systems fighting to win the hearts and minds of teams and employees across the globe. The story looks surprisingly similar to iOS vs. Android.

In 2007, the iPhone was announced. But more importantly, 2007 was the launch of a new operating system for the mobile consumer — iOS.

In 2008, Google announced its competitor to iOS — the Android platform, along with the first device running Android, the HTC Dream. This was the result of an acquisition of the Android team in 2005 for $50M.

Over the next decade, these two products would establish a duopoly in the mobile operating system market. iOS was ahead of Android in market share for the first several years, but in 2010 Android passed iOS and never looked back. This was driven primarily in markets outside of the US. As of 2020, Android owns 87% of the global market. In the US, iOS is used by 59% of mobile devices and Android 41%.

These new mobile operating systems would become the launchpad for an enormous wave of innovation that includes Uber, Tinder, Snapchat, Instagram, and hundreds of other multi-billion dollar products made possible by the capabilities of the new mobile platform.

The history of Slack and Teams

Slack launched in 2013 and was one of the fastest-growing B2B companies ever. Pioneering a new “bottoms-up” adoption strategy, Slack became the darling of Silicon Valley and was used overwhelmingly by developers at blue-chip technology companies. At first, Slack looked like just another messaging tool. As they’ve matured, they’ve enabled a whole new class of applications for the modern worker, with thousands of apps in their app store.

Microsoft launched its Microsoft Teams product in 2017. The origins of Microsoft Teams tie back to the acquisition of Skype in 2011 and the success of Skype for Business, which is now being sunset in favor of Microsoft Teams. Teams has video chat built-in, and copied a lot of the paradigms Slack pioneered such as channels and apps.

Although Slack had quite the head start, MS Teams passed Slack in daily active users in 2019. Both products have grown significantly during the COVID-19 pandemic, but Microsoft Teams seems to be taking the majority of the growth in the market, especially outside of the US.

Teams announced in April it had over 75M daily active users, showing the growth is only accelerating in 2020.

As these platforms mature, there is an enormous opportunity to build a new set of workplace products made possible with these new operating systems. Early success stories include products like Troops, Halp, and Polly.

As other companies start to build on these platforms, it's important to understand how they compare, what each platform good at, what its limitations are, and how to engage with them.

Slack has many similarities to iOS

It’s a premium product that costs more ($6.67/user/mo for Standard, $12.50/user/mo for Plus, compared with MS Teams which is bundled into Office 365 which many companies already pay for). As a result, companies and employees using Slack are premium buyers with more willingness to pay for products.

Slack is led by a CEO with strong design instincts (Stewart) and as a platform is very opinionated about the user experience. As a result, they force applications on their platform to use certain UI elements.

• For users, this creates a unified experience alongside an expectation of elegant interactions.
• This can be frustrating for developers because there are inherent limitations that may reduce functionality, but it’s often an accelerator for new products that can utilize existing components and interfaces to get going quickly.

The API is extremely developer-friendly and uses modern technology.

It’s used globally, but the majority of paying customers and its dominant market share are in the US. It’s considered a sign of being “hip” to use Slack at your startup.

The Slack platform encourages best of breed products to build first-party applications — Google Drive, DropBox, Zoom, etc. There are still simple tools for video calling, note-taking, and workflow building that are built into the OS.

Slack is building “walled-garden” experiences such as Slack Connect that improve the experience for multiple parties communicating on Slack (think blue bubbles in iMessage).

Overall, this means Slack is likely the best place to launch a new product. Users are early adopters and a have high willingness to pay, and the API is superbly documented and easy to get started on.

Microsoft Teams is much more similar to Android

It’s a cheaper product with a free option. As a result, companies and employees using MS Teams are often looking for the budget/free option and will choose that over a “best in breed” solution.

UI elements in Teams are much more flexible. “Tabs” are basically an open iFrame where almost anything can be added to the Teams interface.

• For users, this means endless ability to modify and configure their experience
• Developers can do anything they want but have to spend more time designing elements and components of the user experience.

The API is clunky, sometimes hard to navigate, and built on older technologies.

It’s used globally and has seen incredible adoption driven by Microsoft's footprint around the world. Within the “prestigious” tech circles it is looked down upon (think green bubbles in iMessage).

It fits into a larger ecosystem of Microsoft and integration with Microsoft products is given priority whether it is the best product or not — SharePoint, Word, Excel, PPT, etc.

Overall, Microsoft Teams is the best place to expand a product once it’s been proven on the Slack platform. Users are more “mass market” and expect products to be out of beta and ready for non-technical users.

The playbook to launch your business on the new workplace operating systems

If we continue to follow the metaphor, we get a pretty clear set of guidelines on launching a new product on these platforms.

Most of the biggest products for the mobile platform followed the same strategy — they started with iOS and then added Android once they had product-market fit.

The same strategy works well now. If you’re a disruptive new workplace product, start on Slack and work with technical early adopter buyers to hone the product offering. Once it’s resonating, expand to Microsoft Teams to “cross the chasm” and prove the solution works across a mass market of less technical buyers.

There are some exceptions to this rule. If your users were primarily Android users (let's say you were targeting a non-US user-base) then it could make sense to start on Android. The same goes for Teams — if you’re targeting Microsoft heavy users then start there.