Microsoft Teams has Lost to Slack
So they are banning it.
Following an incredible first day of trading in its direct IPO, Slack is now valued at over $20 Billion. Microsoft’s response? Let’s ban them.
Microsoft is banning Slack and discourages AWS and Google Docs use internally. Sorry to all the folks at LinkedIn, got to follow orders now.
Microsoft has banned the use of the free version of Slack for its 100,000+ employees. GeekWire reports that Microsoft has a list of prohibited apps and services, and even Amazon Web Services (AWS) and Google Docs are “discouraged for use” inside the company.
Microsoft has a funny way of being monopolistic, citing “security”concerns.
Slack chose a direct listing that didn’t raise new money for the company and in spite of the odds is one of the best startup stories in the last decade.
Slack was uniquely powered by word of mouth and that “viral end-user adoption, which is not the case for every SaaS company.” Slack, you see, largely grows within a company, starting with one team. Microsoft tried and failed to compete, like it does in so many races.
Microsoft Becomes an Enterprise Walled Garden
The Slack ban isn’t primarily driven by Microsoft’s competing Teams product, though. Microsoft is reportedly concerned about the security aspects of Slack Free and Slack Plus. Microsoft always has a rational explanation for its decisions.
AWS and Google Docs usage will reportedly “require a business justification” for employee use, and even Microsoft-owned GitHub is discouraged for “Highly Confidential types of information, specs or code.”
Microsoft is, after all, Microsoft after all.
Slack’s Shiny IPO Shows Venture Capital Gambles
With these shiny IPOs and this stock market golden era it’s also fun to see who wins big. Accel, the biggest invester in Slack, owns 23.8% of the company and Andreessen Horowitz owns 13.2% of it.
Here’s a bit of Venture Capital trivia for you. Accel is known for making one of the most lucrative start-up bets in history, parlaying an early $12.2 million investment in Facebook into a stake worth more than $9 billion at the time of the company’s IPO in 2012.
Slack is a great reminder that the most interesting companies are often the ones whose courses aren’t easily charted and where VC invests in a team of founding people rather than in a product.
Accel’s Slack shares are now worth $4.6 billion. That’s a decade after the firm put $1.5 million into the seed round of a gaming company called Tiny Speck, which later morphed into Slack. How incredible is that?
But if you work in Microsoft or one of its many recent acquisitions, No Slack for you!
Microsoft Wants to Own the Open Source and Collaboration Software Space
Startups and developers don’t want to be forced to work with business behemoths. Microsoft can buy out LinkedIn, GitHub, and our data, and try to own the open source space. But the talent would rather support a startup like Slack who understand their customers’ priorities. Microsoft Teams never stood a chance against Slack in the real world.
When you prohibit and discourage the use of the software of a rival, what do you suppose it does to your company morale?
GeekWire obtained an internal Microsoft list of prohibited and discouraged technology — software and online services that the company doesn’t want its employees using as part of their day-to-day work. For a Slack acquisition, then, an AWS acquisition makes the most sense.
Slack is now Prohibited for Microsoft Employees
Interesting to note that Slack is now on the “prohibited” category of the internal Microsoft list, along with tools such as the Grammarly grammar checker and Kaspersky security software.
As for Slack’s new found greatness on the open market as a public company:
Slack doesn’t even need to raise money so a direct listing made the most sense. Microsoft just lost a bit of credibility with me though, as it struggles to remain relevant in all of these sub races — with the usual tactics.
If you are like me and like to cheer for the underdog, Slack’s ticker is beyond genius: NYSE “WORK”. Slack co-founder and chief executive officer Stewart Butterfield is now a billionaire, having held on to an 8.6% stake. Don’t forget the Canadian (Vancouver) roots of this startup that, along with Shopify, are few and far between.
Slack’s timing is perfect in the middle of the IPO Golden Age of 2019.
As for Microsoft, even the cloud version of Microsoft-owned GitHub features on a list of “discouraged” tools and services. Microsoft needs to prioritize security at all costs, it seems.
And if you ever wondered if Slack would come to anything or what it even stands for, Slack is now worth $20 billion and the name was originally an acronym: “Searchable Log of All Conversation and Knowledge.” Slack certainly is that, and a whole lot more now.
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