Slack’s Innovation and Momentum Continues Apace

Frontiers event reveals a polished story

Last week, team collaboration software innovator Slack brought its Frontiers customer event to London. While on a much smaller scale than the flagship event in San Francisco (see Enterprise Insight: Event Report: Slack Frontiers 2019), the event attracted about 800 registrations as current and potential users attended to learn from Slack and its more advanced customers about how to get more value from using the Slack platform.

As in San Francisco, the company’s main positioning at Frontiers London focused on Slack as an alternative to e-mail, but the storytelling has evolved and crystallized over the past few months — undoubtedly as a result of being repeating throughout the company’s direct listing on the stock market, which completed in June 2019.

Adoption Continues at Pace

It’s certainly been a busy year for Slack, not just in terms of its listing but also enhancements to the product and growth in customer adoption. Earlier in October, the company announced that had more than 6 million paid seats and 12 million daily active users, the latter an increase of 37% in the past 12 months. By comparison, enterprise collaboration competitor Microsoft Teams has 13 million daily active users (although this is largely driven by Skype for Business conferencing usage rather than the chat-based collaboration that Slack is used for), and Facebook Workplace has 3 million paid users (see Enterprise Insight: Workplace by Facebook Reaches 3 Million Paid Users)

Slack is notable for the way its tool becomes embedded into peoples’ daily work, with users spending an average of over nine hours a day connected to the platform, and 90 minutes actively using the tool. With these stats, it’s easy to see why Slack compares itself to e-mail, given how long many knowledge workers spend in their e-mail client on the average day, and the frustration that many experience with the siloed inbox-based approach.

However, Slack’s benefits to team collaboration extend far beyond this, helping organizations achieve alignment across employees and enabling more efficient co-ordination of work — the “work of work”, as the company puts it.

Shared Channels for External Collaboration

Although internal collaboration is central to many customers, Slack is increasingly exploring how it can extend improved coordination of work outside an organization. After a long beta phase, Slack’s Shared Channels finally became generally available to all paid customers in September 2019.

It allows two companies with paid versions of Slack to work together in a Slack channel, with both having admin controls over their company’s participation in the channel. Both companies must agree that the channel is shared, both control who from their company is a member, and either can decide to break apart the channel and suspend collaboration whenever they want. In the event of the latter, both companies retain a copy of the channel content, with the company that created it able to continue working alone in the channel.

Over the next few months, Slack intends to build further on the capabilities of shared channels, allowing three or more companies to work together in a channel.

This capability is an extremely important differentiator for Slack against competitors such as Microsoft Teams. Most enterprise collaboration platforms allow third-party guest access to collaborative groups, but Slack’s managed shared channel approach sets it apart. Rapid adoption by customers tells this story well, with more than 20,000 organizations taking part in the Shared Channels beta and 60% of Slack’s largest customers in Europe using the feature.

At Frontiers London, almost every customer on stage said they use Shared Channels, with food delivery company Deliveroo having more than 200 shared channels with its corporate customers and technology partners. Deliveroo also highlighted the positive impact that Shared Channels have had on its customer and partner relationships, resulting in richer and more personal interactions that are more about collaboration than simply transactional communication.

This ability to connect not just employees but also an organization’s partner communities is the holy grail of enterprise collaboration, and at the moment Slack is clearly leading the pack trying to make it possible.

Automating Repetitive Tasks with Workflow Builder

Just before Frontiers London, Slack announced the general availability of Workflow Builder, its no-code application that allows individuals to build personalized automations within Slack. Designed to help cut down the volume of repetitive tasks that people carry out each day, Workflow Builder provides a simple, visual wizard tool to enable users to automate their own personal tasks, embedding the workflow in a channel as a bot, or based on a trigger in Slack or from an integrated third-party application.

Slack has created a handful of templates to help people get started (such as “automatically onboard new channel users” and “collect incident reports in real time”), but there’s clearly an opportunity for the company — or its partners — to provide a much richer collection of templates as customer usage expands.

This is another very important opportunity for Slack as it looks to differentiate itself in this highly competitive market. Customers’ use of Slack for operational teamwork and collaboration is one of the biggest reasons it has such high adoption of third-party and custom integrations or “apps”. There are 600,000 developers building apps on the platform, and 90% of customers use apps in their channels. Slack has over 1,800 apps in its directory, with customers having built 500,000 more custom apps of their own.

Whether it’s allowing Salesforce data to be shared in a channel, building bots to onboard new employees or automating cumbersome processes to take the pressure off IT helpdesks, there is a huge appetite among Slack customers to use the platform to centralize workflows and activities, and this remains a key differentiator for the company against Microsoft Teams.

Workflow Builder has the potential to further increase the “stickiness” of Slack for users and reinforce the concept of Slack as the hub for work. It’s still early days here, and there will undoubtedly need to be some hand-holding for customers as they get to grips with the possibilities for Workflow Builder — and in turn help Slack capture a broad set of uses and templates to support its messaging and positioning. But this is a huge opportunity to further engage and enable non-technical users in making their work more streamlined and efficient, something that workflow tools have not previously allowed for the average employee.

Much More Than an E-Mail Replacement

Given Slack’s meteoric rise since its launch in 2014 and the growing threat of competitors like Microsoft Teams, it’s astonishing that Slack has been able to maintain its momentum in adoption and product advances. These recent announcements show that Slack is determined to succeed in this market, and that it is steadfastly focused on innovating and redefining this category of collaboration software.

The stickiness that its developer community and integration-focused strategy has created means that Slack is becoming increasingly embedded in its customers workflows, making it harder for competitors such as Microsoft Teams and others to displace it. The addition of Workflow Builder and Shared Channels give it an even stronger foundational position in the market.

Slack is also growing its presence beyond its home market, with more than half of daily active users coming from outside the US. The UK remains Slack’s third-largest market behind the US and Japan, and the company has confirmed that international data residency, which will allow customers to determine the region where their Slack data is stored, is coming later in 2019, first in Germany and followed by France and the UK.

The key challenge for Slack is how it positions itself in the market; while the e-mail replacement angle is easy to understand, it fails to fully capture the transformational potential of the platform, and it does not help in articulating Slack’s differentiation over its competitors. The company says that once people use Slack, they “get it”, and it’s that business impact, that fundamental transformation in the way businesses are able to work that Slack needs to articulate in its positioning and marketing if it is to bolster its position against the Microsoft Teams juggernaut.