The booming market for entreprise communications — Slack, GitHub, Atlassian and Microsoft
According to Thomas H. Davenport, knowledge workers are individuals whose main capital is knowledge. Examples include software engineers, physicians, pharmacists, architects, engineers, scientists, design thinkers, public accountants, lawyers, and academics, and any other white-collar workers, whose line of work requires the one to “think for a living”. According to Atlassian, there are nearly 1 billion knowledge workers around the world.

As knowledge is their main capital, these workers really heavily on communication services to exchange and deal with information. Companies that serve these workers’ needs are, amongst others, GitHub, Slack and Atlassian.
Communications for developers: GitHub
The first one, GitHub, is an online platform for coders to share and collaborate on their work (review code, manage projects and build software). They claim that over 28 million developers rely on their platform. Their service is open source (for now) and enjoys high ratings from its users. A quick look at the GitHub’s ratings on Capterra shows that users are very likely to recommend this platform to fellow coders as it enjoys an average rating of 5/5 (out of 845 reviews). On the financial side of things, sources report that GitHub was bleeding cash in the last quarters before it was bought back by Microsoft for an astonishing $7.5 billion.

This hefty price tag may raise eyebrows but according to Paul V. Weinstein in his Harvrd Business Review article, Microsoft is not acquiring GitHub to make money out of it but rather to guide the developer community into Microsoft products.
In other words, Microsoft is not paying $7.5 billion for GitHub for its ability to make money (its financial value). It’s paying for the access it gets to the legions of developers who use GitHub’s code repository products on a daily basis (the company’s strategic value) — so they can be guided into the Microsoft developer environment, where the real money is made.
Communications for businesses: Slack
Slack has experienced an incredible growth story over the past years. Going from just 40.000 paying users in 2014, to over 3 million paying users in May 2018. This enormous growth has gartnered as lot of attention as the communication platform is now valued at over $5.1 billion and has managed to resist Microsoft’s Team and Facebook’s WorkPlace attacks. It also eradicated competition from Atlassian which discontinued their Stride and HipChat products and made a partnership with Slack.

Slack is basically a kind of elaborated WhatsApp for work. It enables its users to create channels in which they discuss different topics. For an automotive company, one channel may be “engine R&D”, another channel may be “marketing” and the list goes on. What users like about Slack is its ease of use and the vast array of apps and integrations that work with Slack.
More recently, users have started using Slack for other purposes than work. One example is a group called “CodeBuddies”. They have created a Slack group that you can join after getting an invite. Once on the Slack, you can find buddies to code with and participate in “coding challenges”. Another less geeky example is the one of “OnlineGeniuses”. This is a Slack community dedicated to marketeers that acts as a forum covering topics such as online marketing, email campaigns, SEO and much more.
Communications for companies and developers: Atlassian
Atlassian made the headlines in 2017 for acquiring the project management app Trello for $425 million. This acquisition was destined to broaden the use of Atlassian’s products such as Jira and Confluence to a wider population.
Jira and Confluence are software that aim to simplify the way developers, designers and all kind of stakeholders communicate in a project. They can flag issues, set to-do-list, resolve arguement and boost cooperation on projects. At least, this is what Atlassian is aiming to do.
When looking at the reviews they get from their users, they are not as shiny as GitHub’s and Slack’s. Looking at a Reddit forum discussing the Atlassian products, one user wrote:
The thing to realise about Confluence and JIRA (I’m less familiar with their other products) is that they are enormously powerful and flexible, but they suffer heavily from the inner platform effect. They’re not so much a wiki and a bug tracker as extremely complex tools you can use to build your wiki and bugtracker. They are also glacially slow, enormously resource hungry, quite unstable, and really reward a deep understanding of how to run heavyweight Java applications in production. Also, Atlassian, as a company, has one of the slowest development cycles of anywhere. Do not expect a bug to ever be fixed in less than a year. — Codayus on Reddit.
The over-complication, poor customer service, slow response time and bugs are issues that keep coming forth in comments from users. Even the most satisfied users (rated the Atlassian products above 4/5 on Capterra) are complaining about the difficuly to use the products.
On top of that, BitBucket, Atlassian’s rival to GitHub is less established as they have over 6 million developers (as of July 2016) while GitHub boasts that over 28 million developers (as of August 2018) use their services. This gap is difficult to close as GitHub has managed to establish itself as the main platform for coders to share and collaborate on their work. It thus all comes down to a classic example of network effects where GitHub was the first one to lock in the developer community and has manage to establish itself as the Facebook for developers.
Finally, while Atlassian’s products are used by over 125.000 users (as of August 2018), it seems that the company is not able to develop and deploy products that gain unconditional approval. And that while spending over $415 million in research and development for the year 2018 (fiscal year ended on June 30), up from over $310 million the year before. The only way they seem to have to gain users is from buying and investing in innovative companies such as Slack and more recently InVision.
Main take aways
While we were first quite excited about Atlassian taking a stake in Slack (one should note that it remains a quite small stake), we took a deeper look at their financials and products. Our excitement for Atlassian was dimnished by the huge amounts they invest in R&D while their product seem to suffer huge bugs, are slow to use and may be under strong competitive threat from more specialized players such as Slack, GitHub. The competition is only going to increase as Facebook’s WorkPlace, Microsoft’s acquisition of GitHub and Slack’s excellent products are growing while satisfying their users.
Looking forward, we may focus on taking a closer look at Microsoft which recently acquired GitHub and LinkedIn (and LinkedIn istelf acquired the learning platform Lynda). These moves are future proof and both services (GitHub and LinkedIn) are widely used and have positive ratings.
