Slack’s Morning After
“Placing ads in the NYT won’t ensure success in the enterprise: Just ask Apple.”
The rite of passage from youth to adulthood is filled with “Morning After” moments — those times when you realize that only 24 short hours ago (or less) you had bad judgment. Today is Slack’s Morning After They Thought They Mattered as Much as Microsoft.
Slack is a great product with deeply devoted fans, there’s no doubt about that. Their management has embraced the “accidental genius” narrative (“We don’t know why people use our product”), have talked about revolutions, and have driven one hell of a valuation. Good for them. Sadly, witty narratives, claims that your technology is disruptive and a lot of paper wealth doesn’t often translate into success as an enterprise software company.
I would bet more people today run discontinued versions of Microsoft Windows than Slack has daily active users. Not to sound too old here, but Microsoft was a profitable company selling to the enterprise long before most of Slack’s staff were even born. Success in this market is measured by decades of commitment, remember that the next time you whip out your fake ID, kiddos.
Microsoft Teams will be a successful product. It won’t solve all the problems of enterprise collaboration, but bundling it with Office 365 will make it successful. Take a look at the disdain and success of Sharepoint and you’ll see that bundling with Office is a great motivator for adoption by some in the enterprise.
As Slack stumbles to the kitchen for aspirin this Morning After let’s address some of their claims from yesterday.
They claim, “features don’t matter.” False. False, false, false. How can you say that then brag about your design, integration marketplace, and so forth? Those would be features, right? And what is Slack but IRC with more features? Slack didn’t invent a new product category. HipChat predates Slack, and HipChat wasn’t even the first to modernize group chat. IRC, something that has been around since before the web, borrowed from Ham radio culture: that’s why they’re called channels.
Okay so people may not care about features (but they do), but without question enterprise customers compare products they buy through the lens of features. After you get past the basics of team collaboration, we’re finding customers also care about features like encryption (and what type), self-hosted or cloud, message escrow, retention policies, key management, user auditing, authentication management (usually on premise), and on and on.
You see, while some of the “innovators and disruptors” in the Bay Area have ignored enterprise IT, it’s not because it doesn’t matter, but more likely because they can’t figure out how to crack this lucrative market. You see the folks who work in the trenches of enterprise IT have the remarkably difficult task of securing corporate assets in an increasingly hostile online world. They need features that protect their company, not Giphy support. Serious shit.
Next, Slack’s gravest lapse of judgment was claiming to be “open and transparent.” For most in the enterprise, the existence of an integration marketplace written to a proprietary API, for an application that does not have reviewable source code, and a cloud application without security review, is not open. To be fair, Microsoft doesn’t do much better on this list; so let’s just call them both closed systems. The difference here is that enterprise has had decades of living with Microsoft’s closeness, Slack is something quite new. For many good reasons enterprise is cautious to adopt cloud vendors. Yes, enterprise is moving to the cloud, but blindly trusting cloud providers keeps C-suite folks up at night.
Finally Slack claims that their success is in part because “you’ve got to do this with love” implying that Microsoft doesn’t care about their customers. Hundreds of millions of people have used products engineered in Redmond — for decades — while virtually every business on the planet has used their operating system or office suite to get work done since the dawn of the personal computing age. Microsoft does care about their customers; every successful company has to care about its customers to succeed. Slack, please, a little bit more humility would suit you well.
As another competitor in the space, we think the announcement of Microsoft Teams is great. Architecturally their product has many of the same security flaws as Slack, but Microsoft entering the market legitimizes the category, focuses enterprise attention to the opportunities of collaboration tools, and frankly encourages everyone to up their game.
There are over 70 players in the market and there will be different choices for enterprise. We position Semaphor as the secure alternative to Slack. SpiderOak been doing secure and encrypted cloud products for over a decade and yes, only two weeks ago, we added enterprise support to the product, but we’re humble enough to celebrate Microsoft’s announcement of Teams.
In a recent study, we estimated that fewer than 20 of the Fortune 1,000 have integrated Slack into their official enterprise software tools set. They include: American Express, Autodesk, Benchmark Electronics, Capital One, CBS, Citrix, Disney, EBay, Expedia, Hyatt, Netflix, News Corp, PayPal, Sentry, Teradata, Time Warner, TriNet and Welltower. This Morning After I would wager Microsoft likely already has more than that.
Once they’ve finished high-fiving themselves and the Alka-Seltzer kicks in, the uneasy haze of the “Morning After” feeling will drift over. Soon they’ll realize that they don’t matter as much as Microsoft and their greatest regret will be that yesterday companies who respect Microsoft might have considered Slack, and now this Morning After they won’t.
