How will the Key Contenders Navigate the New World Order?
After laying the groundwork to discuss the “new world order” of enterprise communications last week, we’ll now discuss the “Big 3” – Slack, Cisco and Microsoft – as well as Google, Atlassian, Facebook and Amazon.
The Big Three Enterprise Players
Slack has had a spectacular emergence as the fastest growing form of enterprise communication, ever. As is not unusual for startups, Slack started with a very different value proposition (multiplayer gaming) that independently “folded.” It then pivoted the entire company’s mission around the internal developer collaboration tool it had built to develop its gaming product; that developer tool took off in the marketplace from the get go, with one of the most successful enterprise product launches in history (8000 companies in the first 24 hours). Nine million active users later, Slack brings unmatched Silicon Valley-grade agility to enterprise communications and collaboration. Slack was instrumental in introducing chatbots to mainstream enterprise use, and has built a massive and thriving developer community that brings its customers unparalleled value-add in collaborative communications. Slack is also the most focused of the Big 3 on mobile; some customer end-user populations appear to use Slack exclusively on mobile.
Innovation and agility clearly run deep in Slack’s DNA. However, its success to date is nearly entirely based on “bottoms up” grassroots adoption; will Slack ever get its manageability up to large-enterprise grade requirements, and will enterprise IT operations ever trust Slack at scale? We are just starting to see evidence of large-scale enterprise contracts – will that last? Next, within large enterprises, Slack appears to largely be used by developer communities – will adoption successfully broaden at scale outside of developer use cases?
Which brings us to Cisco, the pioneer in enterprise VoIP, and in some ways still the most trusted name in enterprise unified communications. Cisco as a company has long had the most robust voice solutions, not surprising given its storied enterprise networks DNA. Its Call Manager solution prioritized voice reliability and voice quality above all else, befitting Cisco’s experience in large enterprise mission-critical communications (vs Microsoft’s consumer/end-user-centric focus & DNA). In WebEx, Cisco has had by far the most mature and most successful cloud conferencing solution. Their “new” SPARK offering represents a do-over of Cisco’s enterprise communications vision, one that directly competes with Microsoft Teams and builds on Cisco’s long experience and strong foundation in the space. However, will Cisco’s network-centric DNA extend and scale into the realm of the user experiences of tomorrow?
And finally there is Microsoft. Its journey to Teams began with needing to solve a pressing need: the SharePoint user experience. While SharePoint enjoyed great success in the 2000s, beginning around 2010 its growth and adoption were constrained by a sub-par OOBE (out of box experience) that required extensive 3rd party assistance to make usable. One theory is that Microsoft created Teams as its user interface bet to make SharePoint (and specifically SharePoint Online) take off. Along the way, Microsoft recognized Teams potential as a communications launching pad (in fact, a launching pad for the entire Office 365 experience), and in the fall of 2017 took the aggressive step of ordaining Teams as its communications user experience of the future, replacing the Skype for Business user experience.
Microsoft brings great strengths: a broadly deployed & proven directory (in Active Directory and now ADFS for the cloud), a huge desktop footprint in Office, a commanding Skype for Business Installed Base in mid- to large- enterprises, and access to the developer community. However, Teams is a two-part experiment of sorts. First, can Microsoft convince its traditional enterprise end-user base to change their day-to-day workflow to map to the new Teams paradigm? Second, can they successfully integrate the Skype for Business conferencing and voice functionality into the experience, in a way that gets adopted at scale by enterprises? Also, is Teams too broad of a surface area for attempting to front-end all of Office? Given Microsoft’s scale, is the Innovators Dilemma a concern? Microsoft purportedly gave serious consideration to acquiring Slack in early 2016, but declined. Relative to Slack, Microsoft is definitely playing catch up. Slack took the first step in defining the market and in cultivating a developer ecosystem. Lastly, with at least two major changes in long-term direction for voice over the last two years, coupled with a number of different migration consideration complexities for Teams in the cloud, will this newest Microsoft direction prove too complicated, uncertain or unreliable (directionally) – for global enterprises to bet their telephony strategy on?
Beyond the “Big 3”, Facebook, Google, Amazon and Atlassian are all significant contenders as well. Relative to Microsoft, Google is taking a different direction with Hangouts, splitting communications across Google Hangouts Meet and Google Hangouts Chat – a work apparently still in progress. Atlassian has a compelling offering with Stride. Stride would leverage Atlassian’s long experience with group enterprise text collaboration (perhaps the deepest of any of the seven), its impressive mind-share with the developer community (perhaps the most devoted audience for team-chat applications) and its relentless enterprise customer focus on this scenario (only exceeded by Slack). Facebook’s acquisition of WhatsApp consolidates the most powerful assets in group chat worldwide (1.2 billion MAUs for Facebook Messenger, added to 1.3 billion for WhatsApp; 60 million businesses on Facebook Messenger). Facebook Enterprise Messenger and WhatsApp Enterprise are driving enterprise-to-consumer communication as on-ramps to leads, payments, and transactions. That particular space appears poised for very significant transformation over the next 3 years, given all the acceleration in chatbots and AI/machine learning. Similarly, if Amazon decides to put comparable muscle into its Chime offering, it has a credible shot at driving to #1 share, given Amazon’s success with Amazon Web Services building a $18B/yr business from scratch in just ten years (the “growth story of the decade”.)
Here at Unify Square, we’re bullish on Teams and have partnered closely with Microsoft to help our customers succeed with their journeys with Teams. However, given the strong competitive field, only time can ultimately tell how the enterprise communications market plays out!