In a $28 billion deal in 2021, Slack joined forces with Salesforce. One of the main goals was to give the communications company more power to fight with Microsoft. Company co-founder Stewart Butterfield railed against Microsoft bundling Teams with Office 365 for years, calling it unfair competition. At one point, he said that Microsoft was “unhealthily obsessed with killing Slack.”
In fact, the business went so far as to file a case against Microsoft with the EU in 2020.
Microsoft finally said this morning that Teams would no longer be grouped with Office 365. Current customers could still use the bundled licence, though.
Butterfield left Slack at the end of 2022, but he didn’t seem to care as much about Microsoft after joining the CRM giant. In 2021, he told TechCrunch’s Connie Loizos that Teams seemed to focus more on meeting software like Zoom than Slack, and he didn’t know the status of the complaint his company filed before joining Salesforce.
Salesforce didn’t have anything to say about the news of unbundling. Microsoft, on the other hand, says it has over 320 million users around the world, which shows that its approach of bundling seemed to work pretty well. That’s not like Slack, which has 32 million people, or 10% of all Microsoft users. Both companies count their users in different ways, so it’s hard to say what that exactly means. But it’s clear that Microsoft has taken a big lead.
Perhaps Butterfield was correct, but it is most likely too late to care now. Alan Pelz-Sharpe, founder and senior analyst at Deep Analysis, told TechCrunch, “Microsoft is unbundling Teams just to avoid an antitrust mess. It’s good for Salesforce/Slack for sure, but in many ways it may be a Pyrrhic victory.” As the market has grown, many bigger companies have already made their choice. Since switching solutions isn’t easy, Teams’ unbundling probably won’t have a big effect on market share.
It looks like Microsoft’s announcement lets them have their cake and eat it too. They can keep their current customers under the current Office 365 bundling agreement while charging new customers to use the product. This will probably give the company an argument with regulators that they’ve unbundled Teams and aren’t breaking any anticompetition rules.
An expert at Constellation Research named Holger Mueller says this could be the first time that a rule that hurts competition has helped the vendor’s business. Mueller said that Microsoft no longer needs the energy and power of the business licence agreement because it has already sold Teams to enough companies with its existing Office accounts.
He also thinks this will help Microsoft get Teams into more accounts where companies weren’t getting Office 365 licences. This won’t help Slack. It’s now much easier for Microsoft to sell standalone Teams licences to companies that aren’t Microsoft. This helps them build goodwill with regulators and keep the stand-alone market fight going against Slack.
Also Read: After Years of Complaints, Microsoft is Going to Separate Office and Teams Around the World
If Butterfield started complaining about Microsoft all those years ago, that probably wasn’t what he had in mind, but regulatory outcomes don’t always turn out the way you expect them to, especially when the market changes so much in that time, or Microsoft’s strategy of bundling just worked.
What do you say about this story? Visit Parhlo World For more.
