Microsoft Teams-Slack rivalry heats up as CEOs brag about their collaboration tools

Microsoft Teams is the top dog in the competitive collaboration tool market — at least, Satya Nadella certainly thinks so.

The Microsoft CEO called Teams the “category leader” on the company’s quarterly call with investors Wednesday following its earnings report. Nadella cited the variety of capabilities Microsoft has built into the service and said that Teams has caught on with big companies, as more than 350 organizations have more than 10,000 people using Teams.

Here are Nadella’s full comments on Teams from the call:

Microsoft Teams continues to gain traction, bringing together everything a team needs: chat, voice, meetings, collaboration with the power of Office, and business process workflow into a single integrated user experience, all with the highest security and compliance. Teams keeps all of your work conversations and meetings in context, eliminating the need to bounce back and forth between different apps with features like integrated calendaring, one-touch to join meetings from your phone, and we are broadening our opportunity with 2 billion first line workers worldwide, adding priority notifications, role-specific targeted messages and the ability to clock in and out of a shift.

Our differentiated offering is driving usage, making Teams the category leader. More than 350 organizations now have more than 10,000 users of Teams.

These comments mark the latest entry in a long-standing rivalry between Teams and Slack that has grown even more fierce as Microsoft has invested significant resources in its collaboration tool, including anointing it as an eventual replacement for Skype for Business as the default Office 365 meetings application. Meanwhile, Slack went public earlier this year, kicking off a new era for the company.

Microsoft CEO Satya Nadella. (GeekWire Photo / Kevin Lisota)

Nadella’s boast came the same day Slack CEO Stewart Butterfield made a number of eyebrow-raising comments about his company’s top rival. During an interview at The Wall Street Journal Tech Live conference, Butterfield discussed a chart Microsoft made earlier this year showing Teams usage passing Slack. The chart was published in the lead-up to Slack going public; it was in a quiet period and couldn’t respond.

But on Wednesday, Butterfield said the move looked like something out of the playbook of the Bill Gates era of the late 1990s.

“I think they feel like we’re an existential threat,” Butterfield said of Microsoft.

Here are a few of Butterfield’s other top Microsoft burns from the interview:

  • “If you look at Google Search trends for Microsoft Teams, all of the top searches are how to uninstall, how to stop it from popping up, how to get rid of it. So there’s a very aggressive push to get people in there.”
  • “There are still a lot of people choosing Slack despite the fact that they can have Teams bundled for free.”
  • “You look at our top 50 biggest customers, 70 percent of them are not only Office 365 users, but they’re Office 365 users who use the integrations with Slack.”

Here’s the full interview:

The rivalry between Slack and Microsoft is well-documented. It dates back to the launch of Teams in 2017 when Slack took the unusual step of placing a full-page ad in The New York Times both congratulating the tech giant and warning that “all this is harder than it looks.”

Since then, Microsoft has acknowledged Slack as a major competitor in its annual report. And the Redmond, Wash. tech giant even included the tool on a list of software that Microsoft employees are discouraged or prohibited from using, primarily for security reasons.

Slack acknowledged the uphill battle it faces against larger competitors, specifically Microsoft, as a significant risk to the company going forward.

Earlier this month, Slack said it has 12 million daily active users, up 37 percent over the prior year but slightly behind Teams. In July, Microsoft said Teams had 13 million daily active users. As Butterfield noted, Teams is attached to Microsoft’s Office 365, giving the tech giant a huge ecosystem of users who don’t have to pay extra for Teams to pull from.

At its Spec developer conference this week, Slack introduced a number of new features to make it easier for people to find apps within the platform and for developers to build and display them. Headlining the new developments is a centralized app store, where users can learn which Slack apps their organizations use and quickly integrate them into their workflow.

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