How Slack’s exit to Salesforce will change the game

To us, the announcement of Slack’s exit didn’t come as much of a surprise. As a European messaging suite we’ve been following Slack since its private beta. We’ve seen it rise, explode, struggle and exit, all in three-quarters of a decade.

It’s safe to say that Slack has become the north star for anyone building a B2B product. Few tools have created such a vocal fanbase and dedicated developer ecosystem, by simply making a good product. A good product with powerful APIs is a recipe for a solid platform — Slack has more integrations than any messenger. In a fair world, that should be enough to dethrone a player like Microsoft. But we don’t live in a fair world and Slack has reached the pinnacle of what a B2B-unicorn can become in 2020. Now, it has found a new home with the CRM market leader Salesforce. People now want to know what Slack’s acquisition means for the messaging market on the whole. Here are my two cents:

Unbundling the Bundlers

First, there will be a strong pushback on Microsoft products. This will happen both in the courtroom and in the global marketplace.

The judicial side seems pretty clear. Product-wise Satya Nadella’s juggernaut is a smart follower. With Office 365, it has created some impenetrable product armour and a very interesting case for antitrust lawyers. Every fortune 500 company relies on Word and Excel software on a daily basis. By bundling its business-essential office suite with new products like Teams and OneDrive, it corrupts multiple sectors of B2B software at once. In my biased opinion, Microsoft Teams is not as good as Grape or Slack — but it is part of an offering, which companies need to function. Unfortunately for companies, an upgrade from MS Office to O365 is a significant investment. There is no room in their budgets for any other tool. MS Teams is not “free” — it’s bundled with essential decade-old products into a suite that costs more than ever before.

This bundling strategy is not new and has failed in the past. A few years ago, a similar case of bundling — Internet Explorer (IE) as the default Windows browser — led to antitrust lawsuits. After Microsoft lost, Chrome and other browsers finally got a fair shot at the market. An outcome that not only led to the end of IE but, also, saved the freedom of the internet. For the time being.

This time, regulators are slower to react and the strategy seems to be paying off. Slack has filed antitrust lawsuits in Europe and reached out to other vendors to follow suit. Our company, Grape is participating. There’s a good chance that in less than 24 months the European court will order an unbundling of Office 365, OneDrive, Teams and other products. This step will trigger further changes in digital policies, to reestablish plurality in B2B software.

On the market side, at least in Europe, we see that companies are starting to consider alternatives to the single-vendor strategy. You see, the problem with using the lowest common denominator from one global provider is that it forces everyone to compromise. In technology, the right tools give you a significant advantage over the competition. Orion, the algorithm that calculates the logistics behind UPS deliveries, outperforms Google Maps. Communication, according to a McKinsey study, still takes up about 61% of an employees’ workday. As long as there are people, new communication tools will emerge — and some will be leaps and bounds ahead of their predecessors. Microsoft, fighting a Napoleon-esque war on all B2B fronts, will not be able to keep up with all challengers. They’re struggling already — hence, the bundling.

Unleash the Niche

Secondly, we are entering a decade of spezialised communication. The white-collar messenger war is underway, but the specialized messenger war is around the corner.

People that don’t look at Word documents all day, need completely different products to get work done. Nurses, doctors, teachers, truckers, astronauts, store clerks and factory workers all rely on Whatsapp and other consumer products, as Teams and Slack are too general-purpose focused to meet their needs. They don’t even tap into the possibilities of a specialized messenger. Coordinating appointments and shift plans. Onboarding new workers through automated messages. Sending out directives to 250,000 employees at once (shoutout to all hospitality messengers). Or sending polls to parents to pick the best day for a school trip. At the moment, huge niche players are emerging in specialized industries. Messengers for schools, messengers for health care, and the like are the new norm. Grape’s integrate-able components follow this trend. We’ve built one of the largest school messengers, together with a European niche market leader. Similar projects in a multitude of industries have followed.

The more digitalization progresses, the more specialized all industries become. A hotel messenger does more for the efficiency of the staff than a general messenger with a few integrations. It’s like telephones before and after dial-based hotlines. If you commit to one industry, the possibilities are endless.

Suite Child of Mine

Last but not least, we are reaching the zenith of the business suite era.

Atlassian is not only a great company (Jira and Confluence are market leaders for a reason), they are also adroit strategists. Since their Hipchat exit to Slack, they have been paying close attention to the messenger’s strategy. There is a good chance that Atlassian will jump on the Salesforce train and, with Slack, create a new super bundle with Salesforce. This would allow them to attack Microsoft from two sides: project and client work. With such a strong offering, many company divisions would choose them over O365. Just like in the first years of Slack, departments within organisations could buy “Atslackforce”, regardless of corporate policy. The western white-collar worker will have three options: Google Apps, Atslackforce and Microsoft.

Perhaps, a fourth (open-source) and fifth (governmental) player will emerge:

On the open-source (OS) side, a few players will become more significant. Especially in Eurasia, companies use OS to reduce reliance on US-Cloud vendors. There have been previous attempts , e.g. by the city of Munich, to completely change their office tools to OS. After Microsoft intervened, the project, and with it a great precedent for open source software failed.

On the digital policy side, there is a good chance that Europe will actively engage in the B2B software industry. A few decades ago the European Union created a new airplane manufacturer, to break Boeing’s de-facto monopoly. Similar measures could counter the dominance of US-products in the business-sphere. Both France and Germany have started searching for new contractors and are investing in that field. The first significant changes could happen shortly after the antitrust ruling in the EU courts.

In closing, many things are going to happen in the messaging industry over the next ten years. While the merge with Salesforce signals an end of the independence of Slack, this is not the last time we will hear from Butterfield’s creation. We will soon see significant changes in policy, specialized communication and new suite offerings.

As a player in this field, this has been the most gratifying, occasionally stressful and overall educational adventure of my career so far. I can’t wait to present the next things Grape has in store for our customers, friends and partners.

Communication will always change. Let’s change with it.