The big winner in the Slack fight at Microsoft could be Google

Slack surprised Microsoft with a competition complaint in Europe yesterday. After arguing for months that Microsoft Teams is not a true competitor to Slack and is more like Zoom, Slack finally admitted what was clear all along: Microsoft Teams is a competitor and Slack is having a hard time competing with Microsoft. It’s not a surprising admission, but if Slack finds it difficult to compete with Microsoft, then he will face even bigger headaches once Google finally takes action. After poking around with communications apps for years, there are early signs that Google is now ready to take on Slack, Microsoft Teams, and Zoom.

Google’s business game has huge implications for Slack’s antitrust offering in the EU, and the company’s future beyond. It appears that Slack will take on two giant tech companies that leverage their dominant products to take a large chunk of the communications business in the workplace. If Slack manages to convince the EU to take action against Microsoft’s bundling, he still faces the looming threat that Google bundles his own apps and services in a similar way. And for antitrust crusaders, G Suite shows that the bundling problem is much bigger than Microsoft.

Slack’s competition complaint, released yesterday, is directed exclusively at Microsoft and focused on the company’s team pool with its Office 365 subscription. “What we are asking is that teams separate from the Office suite and Sold separately with a fair trade price associated to compete on the merit of our product, “David Schellhase, Slack’s chief legal officer, explained in a Call with Reporters yesterday. “It really is as simple and straightforward as that.”

Microsoft has bundled a variety of productivity apps with its Office suite for decades, and chose to bundle Teams for free for Office 365 customers when it launched in 2016. This bundle, coupled with tight Office integration, has made it difficult for Slack to convince Companies that are already paying for Office to pay extra to get Slack.

But Google seems ready to replicate that tactic. G Suite, which includes regular Gmail users, surpassed 2 billion active users earlier this year, and new G Suite boss Javier Soltero said at the time that “changing the way people work it is something for which we are in a unique position. “

Bachelor recently came to Google after a four-year career at Microsoft, a company he originally joined when the software giant acquired Accompli, which later became Outlook for iOS. It has already demonstrated its expertise in spotting trends and filling in the gaps with apps and services that were good enough for Microsoft to acquire. If you can repeat this on Google, then Slack has another giant competitor ready to bundle up and take advantage of its popular communications and productivity apps.

Google has already shown signs that it is getting closer to Zoom, Microsoft Teams and Slack. Google made Free Meet earlier this year to try to compete with Zoom’s sudden popularity, and has begun to integrate the video conferencing application deeply into Gmail and Google Calendar. The next step towards true Slack and Teams competition is Google’s initial work to integrate Google Chat, Rooms and Meet in Gmail. This won’t come until later this year, but it’s clearly a high priority at Google.

If Google can really run here and provide a more consistent communications platform that combines email, chat, and video calls into one experience, then that’s as big a threat to Slack as it is to Microsoft’s teams.

Slack did not have a good response to Google’s impending threat, and why Google’s bundling approach is less threatening than Microsoft’s. “Google and Microsoft are different,” says Schellhase, answering a question about why Microsoft’s work with Teams is different from Google’s recent approach. “Microsoft has a dominant position with the Office productivity suite and all the auxiliary software. There is no law against having a dominant position, but there are laws on how companies with a dominant market share should behave. One thing they can’t do is link a new stand-alone product to the dominant product they have. “

If you look at the gross numbers between Google or Microsoft’s reach or domain, Office is used by about 1.2 billion people, and Google says that G Suite is used by 2 billion. The key difference between these numbers is that the vast majority of people who use Office use it as part of a work license or subscription, while the overwhelming majority of what Google calls G Suite users are the roughly 1.5 billion Gmail users who probably don’t All use the service for work. Until now, Google hasn’t focused on tapping those free users into business customers, but when it starts, it could become a major player overnight.

Microsoft dominates the workplace with Office, but Google clearly dominates consumer use by email, search, and services like YouTube. Google’s free services are also used for work. This is especially true in education, where G Suite and Chromebooks continue to take over the classroom in the United States. Google’s ability to bundle and integrate Meet free with Gmail should be a concern for Slack, even if the company is not yet willing to admit it or fight that battle.

It is still unclear whether the European Commission will formally investigate Slack’s complaint. We will likely have months of uncertainty until a decision is made, and these are key months for Microsoft, Google, Slack, Zoom, and many others struggling over the way companies and students communicate.

“We have seen two years of digital transformation in two months,” said Microsoft CEO Satya Nadella in April. Companies have flocked to services like Microsoft Teams and Zoom during the pandemic. While Microsoft teams outperformed Slack with 13 million daily users a year ago, that was not enough to provoke an EU complaint. It is clear that the digital transformation that companies are forced to accelerate during this pandemic has pushed many more to Microsoft teams rather than Slack.

Microsoft Teams usage skyrocketed nearly 40 percent in a single week at the start of the pandemic, from 32 million to 44 million. That change hasn’t slowed down either, as Microsoft revealed in April that Teams now has 75 million daily active users. Slack has said it has broken user records due to increased demand for remote work, but the company has so far only said 12.5 million simultaneous Slack users. That number is also different from the 12 million daily active users that Slack previously revealed in October.

Microsoft responded to Slack’s complaint in the EU, and the company took the opportunity to highlight one area that Slack missed: video conferencing. While Slack truly supports video conferencing, Microsoft says, “With COVID-19, the market has hosted teams in record numbers, while Slack suffered from its absence from video conferencing.” Slack’s video conferencing is far inferior to teams, and it’s the big reason Slack partners with Amazon to transition to Chime for voice and video calls.

Lack of Slack in reliable video calls and video conferencing highlights one of the main differences between Microsoft Teams and Slack. Microsoft has leveraged its investments in Lync and Skype and included them in teams and chat, while Slack has brilliantly adapted IRC for the workplace and has the ambition to really eliminate commercial email.

The differences between Slack and Teams have allowed them both to compete for different customers, especially since Microsoft caters to the Office and Slack crowd for a combination of G Suite, Zoom, and other tools. However, Google is looming large. Tighter integration of Google Meet into Gmail affects a weakness of Slack, and if Google is capable of producing a compelling competitor to Slack, then Slack will face much bigger problems than just Microsoft.