Teams, Slack, and Discord in Retrospect

Aug 16, 2022
In 2016, Microsoft announced Microsoft Teams. Slack, the market leader at the time, took out a full-page ad in the New York Times titled "Dear Microsoft." It ended with a phrase nearly copied from the Apple to IBM ad, "So welcome, Microsoft, to the revolution." Three years later, Teams would pass Slack in Daily Active Users (DAUs). Four years later, Salesforce acquired Slack.

A History of Welcome, Seriously Ads

Slack created a new enterprise product category and modernized an old technology (IRC). Now that the company is over a decade old, a retrospective of how the market unfolded.

There's a chart that's been floating around comparing daily active users (DAU) between Microsoft Teams and Slack (2020).

Let's look at the DAU estimates today across Teams, Slack, and Discord, gathered from any public data I could find:

2017: Teams (2mm) / Slack (6mm) / Discord (9mm)
2018: Teams (8mm) / Slack (8mm) / Discord (19mm)
2019: Teams (20mm) / Slack (12mm) / Discord (?)
2020: Teams (75mm) / Slack (14mm) / Discord (?)
2022: Teams (270mm) / Slack (18mm) / Discord (?)

Slack had a great exit ($27b) to Salesforce, but could it have captured more value? Now that we are far enough past the emergence of enterprise chat applications, some hypotheses, and observations.

Free distribution is hard to compete against. MS Teams (anecdotally) continues to be a "worse" product than Slack. But distribution through the Microsoft Office bundle makes enterprise penetration nearly trivial. First-class integrations with Sharepoint and Outlook make for features that Slack can't compete against without building a significantly larger product.

Slack missed video. In hindsight, video chat was an essential feature that Slack lacked. Even post-pandemic, it will continue to be an essential tool for remote collaboration. Slack was slow to roll out video. How much of Teams growth was due to its video chat? Are there natural benefits to grouping video, voice, and text?

Chat bots never materialized. Slack's big bet was the Slack app economy. While Discord users embraced bots, the enterprise user never became a power user of bots (save some alerting bots). Even Discord has made some Twitter-like missteps with its API (see discord.py support).

Squeezed from both sides: enterprise and consumer GTM. While Microsoft cannibalized Slack's enterprise growth, Discord found product-market fit with gamers, crypto, and now, startups. Enterprise slack channels quickly became "uncool" compared to their Discord alternatives. It will be interesting to see whether or not Discord can convert its large userbase to revenue (e.g. an enterprise product or something else).

An open-source alternative didn't win. Mattermost is an open-source alternative to Slack and Teams. It found its niche among privacy-conscious and self-hosting enthusiasts but not mass adoption. The interesting hypothesis here is that if Slack's API became deeply integrated into a company's infrastructure, you'd imagine an open-source solution would be the best option.

Slack for sync or async communication? Slack didn't replace emails. Unseen messages are hard to find if they are not dealt with immediately.

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