Is Not Buying Slack among Microsoft’s Big Regrets?


Jun. 26 2019, Updated 8:52 a.m. ET

Slack: Microsoft’s Achilles heel?

Just yesterday, Bill Gates spoke about one of his biggest regrets. As you might have guessed, it’s letting Google (GOOG) build Android. He said that Microsoft (MSFT) was in a natural position to build an operating system to compete with Apple’s iOS. However, it failed miserably, as its Windows Phone couldn’t compete with Google’s Android. He said that this mistake cost Microsoft $400 billion.

Microsoft could well be regretting not owning Slack. Back in early 2016, there were talks of Microsoft buying Slack (WORK) out for $8 billion. However, the deal was shelved in favor of building Skype for business. Fast forward three years and Slack was valued $22 billion on its public debut.

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Will Microsoft swallow Slack?

Within months of deciding not to buy Slack, Microsoft unveiled Microsoft Teams, its product that directly competes with Slack. The product has grown considerably ever since with over 200,000 organizations using it. Being a part of the Microsoft family also helps teams with MS integrations. Think of it as a tool that integrates Microsoft Word, Excel, Powerpoint, and Skype into one. However, Slack leads the way with third-party integrations.

On the pricing front, Microsoft has been aggressive, offering more features in its Free Teams plan and offering lower pricing per user for the paid ones. With a large enterprise customer base and financial muscle, Microsoft has all it takes to swallow Slack. Will it? The battle is just starting!


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