Why Slack should worry about Facebook, Microsoft and Google

Slack may soon be careening back to earth following a meteoric rise that saw the messaging app become one of the most popular and revered in business. That’s because in the last 30 days two of the world’s largest and most influential technology companies have set their sights on Slack and the burgeoning, increasingly crowded collaboration market.

Workplace messaging and communications apps have been vying for enterprise adoption for years, but various macro trends have come together to create a greater opportunity and interest in the collaboration space, according to Vanessa Thompson, research vice president at IDC’s collaboration and communities program (CIO.com and IDC are both owned by International Data Group.). The ubiquity of cloud and mobile technologies combined with a decline in annual productivity per working hour among U.S. workers has carved out a new space for apps like Slack, Workplace by Facebook, Microsoft Teams and others to make a move.

Incumbents battle against Facebook and Slack

In many cases, the communications needs of employees are not being met by the tools provided by their employers, says Raul Castanon-Martinez, senior analyst at 451 Research. “Vendors know there is great potential and the market is up for grabs.” New entrants Slack and Workplace by Facebook are at one end of the spectrum while incumbent providers of collaboration and business communications such as Atlassian, Avaya, Cisco, IBM, Microsoft, SAP and others are updating their offerings with integrated mobile messaging and artificial-intelligence (AI) driven chatbots, according to Castanon-Martinez.

“Business workflows and business communications are coming together in ways that were not possible before,” he says. Advances in AI and natural language processing enable workflow automation, which empowers workers to be more productive on the device and app of their choice. “Enterprise workflows are now coming to their smartphones and employees will be able to focus on the task at hand rather than having to jump around between their smartphone, laptop and between applications,” Castanon-Martinez says.

[ Related: Microsoft Teams targets Slack in crowded collaboration market ]

These new and reinvigorated apps are also filling gaps in the market of collaboration and communications products, according to Adam Preset, research director, Gartner. “We have big, well-known vendors in consumer and enterprise areas bringing their resources to bear to try to create a single, multipurpose instrument for the modern worker's inputs and outcomes,” he says.

“Working from anywhere means rethinking how to work together. It means smaller chunks of information delivered faster, but continuously,” Preset says. “Messaging as a technology is a key underpinning. The rise of messaging and messaging apps for personal use informs what kind of communication we might like to see in the workplace.” There isn’t a single enterprise vendor sitting on the sidelines of this market anymore, but it’s a dynamic market that may not last in its current form, according to Preset. “Consolidation around mega-vendors is a well-established pattern.”

Can Slack hold on to its lead?

While the incumbents are prepping for the challenge, Slack and Facebook have earned the distinction of being taken seriously, Castanon-Martinez says. Facebook owns the three top messaging apps in the world and Slack is “perhaps the best example of a tool that has penetrated the enterprise because employees actually like to use it,” he says. The competitive landscape for Slack has also shifted as it moves beyond its core messaging app into a central hub for enterprise productivity. “This is a big challenge for Slack, but the company has jumped ahead of the incumbents so they still have the lead.”

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However, because Slack is a singular product it lacks the suite of enterprise tools that companies like Microsoft, Google and others can provide. Packaging collaboration and messaging apps with other apps for productivity is “absolutely critical” for companies to achieve scale and long-term growth, says Melissa Incera, associate analyst for collaboration and business applications at 451 Research.

“Collaboration is the point where personal and group productivity meet,” Incera says. “The better these tools integrate with and support personal work habits, the more people will use them. In this sense, Microsoft has a huge advantage because its productivity applications are already so engrained in corporate culture.”

[ Related: 6 Slack alternatives worth a look ]

Enterprise IT shops and procurement departments also prefer shopping from a single vendor because it’s more efficient for licensing and can create a lighter operational burden, says Preset. “The more enlightened organizations are, the more they're willing to dive deeply into investigating what's best for end users to accomplish their work,” he says. “However, the practical reality is that we don't need the best all the time, and sometimes we can't afford the best. Sometimes all we need is good enough.”

Google is the wild card

Now that Microsoft Teams, an app Microsoft has been developing for the past 18 months, is on the scene, one of the biggest remaining wild cards is Google. The company currently maintains at least eight different messaging apps. It plans to shift its consumer-centric Hangouts app towards the enterprise, just as it’s starting from scratch with two new apps for consumers: Allo and Duo.

“Google's advantage has been its user experience, its cloud nativity and, more recently, its analytic capabilities, but it has really struggled to upend Microsoft's hold on the office productivity space,” Incera says. “The repositioning of Hangouts and G Suite is indicative of some larger priority shifts for Google as it recognizes a need to address the business use case apart from its consumer experience.”

[ Related: Facebook at Work finally launches as ‘Workplace’ ]

IDC’s Thompson also believes Google will introduce a more refined and sophisticated app that meets the communications needs of its existing enterprise customers. The company has added features to some of its apps in G Suite that take advantage of artificial intelligence and organize tasks around teams such as Team Drive, a new capability in Google Drive that brings content ownership, sharing and management up to the team level with more controls.

Google could still revamp Hangouts or extend Google Spaces to provide an experience that’s similar to the newest options in the enterprise collaboration app space, according to Preset. “There is more than one way to successfully accomplish work. Google doesn’t have to make a Slack clone,” he says. “What they have to do is ensure that the same kinds of outcomes achievable in Slack or Microsoft Teams or Workplace by Facebook are possible for those who have chosen the Google way.”