If it’s possible to be a cool kid in enterprise software, Slack has managed it.
The enterprise messaging application, gunning to take over internal comms in workplaces large and small, has raised over half a billion dollars, pushing its valuation over $3 billion. Fueling investor demand for its shares, and driving the price they are willing to pay, is its impressive growth.
As TechCrunch’s Josh Constine put it in 2016: “Slack’s growth is insane.” And the company has held onto that growth. Announced at the Slack Conference yesterday, the company has picked up 500,000 paying users since October of last year, putting it at a total of 2 million paying users. The messaging company also reported 6 million daily active users across both its free and paid plans.
But that growth hasn’t just attracted deep-pocketed investors and glowing coverage. It also has attracted competitors, some of which are formidable in size and ambition. So today, let’s take a cursory look at some of those competitors and how they may fare against Slack’s impressive growth. (Slack didn’t return a request for comment before the time of publication.)
Primarily known for its developer tools and project management software, Atlassian is the owner of Slack’s primary competitors, HipChat, a messaging app the public company acquired in 2012. But the app, while maintained, was not as beloved as Slack became.
Without firm numbers, we can’t definitively say how much of a dent Slack has made in HipChat’s growth. But for Atlassian, the perception that it’s fallen behind was likely enough to justify a complete rebrand announced as Stride last week.
In general, the Stride platform appears to mimic Slack. But it has several unique features that set it apart, such as Focus mode (a way to mute all of your notifications and messages) and the ability to self-host an install. The company will also port all HipChat data into the new Stride platform, bringing its former userbase into the new product.
So while Atlassian may have let HipChat slide, the company appears to have made a concerted effort to improve the product. It also has a large install base to sell into via its other product offerings, and, with the redesign, Atlassian can potentially swat off future HipChat-to-Slack converts.
And unlike Slack, Atlassian’s livelihood doesn’t depend on owning internal comms—even if it would prefer to.
The company’s main application, Todoist, offers cross-platform to-do lists for personal and team use and has over five million users. The company also announced Twist this year, its competitor to Slack.
Called the “company’s bet against real-time messaging,” Twist has a channel structure much like Slack’s; however, the app prioritizes threaded conversations rather than one-off messages to help keep conversations on topic. The company also has done away with an online indicator in an effort to reduce notification-induced FOMO.
However, convincing teams to switch from Slack to threaded-only convos may prove to be a difficult sell. To some, the difference may be marginal and not worth the switching cost. This leaves Twist to fight for organizations that have not adopted a messaging solution. That’s not an impossible task—Doist has bootstrapped its way to success in project management. But in messaging, it’s now up against a unicorn with an army of well-funded sales and marketing folk.
Although bootstraps are durable, it’s not unheard of for them to break.
When Microsoft announced Teams, Slack’s CEO, Stewart Butterfield, welcomed the competition in a New York Times full page ad.
Teams, like the other competitors mentioned, hews closely to Slack’s interface. And given that it comes from Redmond, Teams integrates tightly with Microsoft Office ecosystem. Microsoft has also taken advantage of its developer chops to support a bot ecosystem similar to Slack’s. Recently, the software giant also announced a partnership with Adobe to integrate its e-signature technology into Teams.
And while we don’t have solid user numbers to compare, Microsoft’s alternative to Slack appears to be growing. According to a Crunchbase News report, Teams is employed by 125,000 organizations. Slack, meanwhile, announced that it counted 50,000 organizations across its paid member base.
Given that Microsoft Teams is bundled with Office 365—which has, at last report, 60 million users—Slack has a serious contender in terms of scale. That said, Microsoft has a history of failing to compete effectively in this space, even when its install base gives it immense competitive advantage. Yammer, which Microsoft acquired for $1.2 billion, has convulsed under its owner over the years. Time will tell if Microsoft will manage to leverage its competitive edge through Teams.
While not on its face a Slack competitor, Discord, the messaging application geared towards gamers, has taken on a life of its own.
With bubbly branding, Discord appears to work much like Slack. It features groups and channels, with a particular focus on how easy it is to start video and voice chats among users. And it’s target market appears to be responding well. The platform has attracted 25 million users, likely helping fuel its funding to slightly over $79 million to date.
Right now, Discord has not directly set its sights on Slack. The company, at least publicly, compares itself primarily as a competitor to Skype. But it’s not hard to imagine that the company could eventually diversify its target market to include businesses. However, it may well be content with staying in e-sports market, which is projected to reach $1.5 billion by 2020. That said, Slack is only one landing page and a campaign away from attempting to grab the same market. After all, Slack’s a unicorn, and unicorns aren’t known for passing up an opportunity to grab market share.
Of course, there are many other Slack competitors. There is Mattermost, a self-hosted enterprise messaging application that raised a seed round in February. Google has also announced intentions to compete with Slack through Google Hangouts, though details on its real-world use are spare. Facebook has also attempted to get in the enterprise messaging market through Facebook at Work, but the company has no history of competing effectively in the workplace.
All in all, Slack may have growth, but that success has earned it new, and able competition. Will that competition be able to cut into Slack’s growth, eventually impacting its ability to raise or go public?
Hopefully Butterfield takes out another ad answering those questions.
Illustration: Li-Anne Dias