As Microsoft unbundles Teams, it might not have the impact on Slack you think

One of many main causes that Slack joined forces with Salesforce in 2021 in a $28 billion deal was to present the communications firm the clout to compete with Microsoft. For years, firm co-founder Stewart Butterfield railed against Microsoft bundling Groups with Workplace 365, calling it anticompetitive and saying at one level that Microsoft was “unhealthily obsessive about killing Slack.”

The corporate went as far as to file a complaint in opposition to Microsoft with the European Union in 2020.

This morning, Microsoft introduced it was finally unbundling Groups from Workplace 365 sooner or later, though present clients may proceed to make use of the bundled license.

Butterfield stepped down from Slack on the finish of 2022, however he appeared much less involved about Microsoft after he grew to become a part of the CRM big, telling TechCrunch’s Connie Loizos in 2021 that Groups gave the impression to be more focused on assembly software program like Zoom than Slack, and he wasn’t conscious of the standing of the criticism his firm filed earlier than changing into a part of Salesforce.

Salesforce, for its half, didn’t have any touch upon the unbundling announcement, however Microsoft’s bundling technique appears to have labored fairly nicely, with the corporate reporting it has over 320 million customers worldwide. Evaluate that with Slack, which has 32 million customers or 10% of Microsoft’s whole. It’s arduous to know what precisely which means given the variations in how the 2 firms rely their customers, however it’s clear that Microsoft has opened up a major lead.

Perhaps Butterfield was proper, however it’s in all probability too late to matter. “Whereas Microsoft is unbundling Groups merely to keep away from an antitrust mess, it’s good for Salesforce/Slack for positive, however in some ways it could be a Pyrrhic victory,” Alan Pelz-Sharpe, founder and principal analyst at Deep Evaluation, instructed TechCrunch. The market has matured to the purpose that many bigger companies have made their alternative, and since swapping out options isn’t a trivial matter, unbundling Groups is unlikely to have an considerable influence on market share.

Microsoft’s announcement seemingly permits them to have their cake and eat it too, protecting their current clients beneath the present Workplace 365 bundling settlement, whereas charging future clients for utilizing the product, and presumably giving the corporate an argument with regulators that they’ve unbundled Groups and are usually not in violation of any anticompetition guidelines.

In actual fact, Holger Mueller, an analyst at Constellation Analysis, says that this might be the primary prevalence the place an anticompetitive regulation helps the seller’s enterprise. “Microsoft has merely bought Groups to sufficient firms with its current Workplace accounts and now now not wants the vitality and energy of the enterprise license settlement,” Mueller mentioned.

What’s extra, moderately than aiding Slack, he sees this as serving to Microsoft to get Groups into extra accounts the place firms weren’t shopping for Workplace 365 licenses. Redmond can now promote standalone Groups licenses into non-Microsoft outlets way more simply, all whereas constructing goodwill with regulators, and nonetheless sticking it to Slack within the stand-alone market battle.

That’s in all probability not the result that Butterfield envisioned when he began complaining about Microsoft all these years in the past, however the regulatory final result doesn’t at all times come out in the way in which you anticipate, particularly when the market shifts so dramatically within the intervening years — or Microsoft’s bundling technique merely labored.