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Microsoft Teams sees significant growth — but Slack isn't going anywhere

Microosft Teams iOS and Surface
Microosft Teams iOS and Surface (Image credit: Windows Central)

Microsoft Teams saw major growth throughout 2019. The service, which initially launched at the tail end of 2016, reached 20 million daily active users (DAU) in November, according to Microsoft, standing above the 12 million daily active users its chief rival in the team communication space, Slack, claimed in October. That fact has stirred up lots of discussion about Teams' future trajectory and what it means for Slack.

The narrative that has developed around Slack and Teams isn't as simple as it appears at first glance, however. Microsoft is certainly poised to see some explosive growth in the coming months. Ultimately, though, there's room for both apps to co-exist.

20 million DAU is a drop in the bucket

Microsoft Teams on iPhone

Source: Windows Central (Image credit: Source: Windows Central)

While Teams' 20 million daily active user metric is impressive, it's just a small sampling of its potential for growth. Teams is linked to Office 365, which gives the service a base of more than 200 million potential users to draw upon, says Hunter Willis, product marketing manager for AvePoint, a company that helps others make the transition to Office 365. The barrier right now, Willis says, is the deliberately slow pace at which IT departments are rolling out access to Teams as they make sure proper management and governance plans are in place.

"Adoption rates are still relatively slow for the platform right now, however, I think that as larger Microsoft companies become more confident about their deployments and start rolling out the solution, we'll start to see adoption rates skyrocket," Willis says. "I suspect this will be visible in the next 6 to 18 months, and with Slack and Microsoft going back and forth – as they have been – I imagine that this process will be very visible."

Teams could grow as large as Office 365 will let it.

Larry Cannell, a research director covering enterprise collaboration for Gartner, agrees. "Teams has the potential to grow as large as Office 365 will allow it," says. Teams' biggest barrier to growth, according to Cannell, will be user adoption. Specifically, the challenge lies in whether Microsoft can get people to use it for more than just the occasional message or conference.

Where we're likely to see a spike in growth is with the transition of Skype for Business users over to Teams. Microsoft is already encouraging the transition for current Skype for Business users, and Skype for Business Online will retire in 2021 in favor of Teams.

"By replacing Skype for Business Online with Teams, Microsoft can justify everyone having the app loaded on their desktop and phone," Cannell says. "This is also an example of how Teams and Slack are not quite the same product."

Battle for the workplace

Slack on iPhone

Source: Windows Central (Image credit: Source: Windows Central)

Microsoft Teams' momentum hasn't gone unnoticed by Slack, and the company has been very vocal about how it views Teams as a competitor. Earlier in 2019, Slack CEO Stewart Butterfield was very clear that he doesn't see Microsoft Teams as a threat. However, that hasn't kept the perception of a duel for the workplace from entering the narrative among the tech press.

In Slack's most recent earnings call, Butterfield admitted that he expects Microsoft Teams's DAU count to hit "50 million in the next six months and then 100 million within the next year," unless Microsoft hits a roadblock of some sort. Butterfield chalked that up to Skype for Business users being "force-migrated to Teams," though he also tempered concerns by drawing a distinction between Teams and Slack.

"Although Microsoft markets Teams as a Slack competitor — and there's no doubt this causes confusion in the marketplace — in practice, these are different tools used for different purposes and our customers achieve markedly different results," Butterfield said during the earnings call.

Slack's CEO says Teams and Slack are different tools, used for different purposes.

"Slack can bring together apps, people, and information all in one place so that people can do their best work by having that single source of truth," a Slack spokesperson told us when asked to expand on how it sees Slack and Teams as serving different purposes. "The vast majority of Teams DAUs are just using it as a replacement for Skype for Business (i.e. conference calls and instant messaging) because they were forced to transition from Skype to Teams."

Though both are generally seen as workplace communication tools, there may be some merit to Slack's claims. Its ease of setup, in particular, could make it more attractive to organizations that are just getting started with these sorts of communication tools. "Slack is still a great app that is easy to use and is easier to get started with," Willis told us. "[Its] look and feel have been expertly tailored, and I have heard feedback that users prefer the way it feels to Teams."

Microsoft Teams Android

Source: Windows Central (Image credit: Source: Windows Central)

Another major factor that will continue to drive Teams growth, Willis says, is the work Microsoft has done on ensuring integrations and data management tools are in place for larger organizations. "Teams takes the lead due to its improved organization of chat information and the ease and number of integrations with other services, many of which users are already familiar with (Exchange, One Drive, SharePoint, Office)," Willis says. "Large organizations prefer Teams because of the level of controls and data management that comes with it."

Willis admits that Slack has made great strides in improving its security and bot integration capabilities. However, he still sees Teams as the clear winner in this department, at least for now.

"In order to use Slack as an integrated tool, you have to maintain any connected apps that bring the capabilities desired by the appropriate users," Willis says. "This aspect of using the platform for collaboration can quickly become a huge burden on organizations that have security and compliance requirements."

This is something Microsoft clearly sees as an advantage as well. "Customers have chosen Teams because it provides a single hub for everything teams need — chat, video conferencing and calling, their Office files, the apps they use every day, and industry-leading security and compliance capabilities which today's modern enterprises require," a Microsoft spokesperson told us, without addressing Slack's claims directly.

To be continued

Slack call

Source: Windows Central (Image credit: Source: Windows Central)

If one thing is clear, it's that we'll see Teams hit other major milestones in the coming months and years. Along with 20 million DAUs, Microsoft says it counts 30 million weekly active users, and 500,000 organizations across 181 markets and 53 languages already using Teams in some capacity. The cloud that will remain over that growth, however, is something Slack has been quick to latch onto: engagement.

It's clear Teams will hit other major milestones in the coming years.

Slack says its engagement metrics are much higher than Teams. Following its most recent earnings, Slack also noted that more than 70 percent of its customers are also Office 365 users. That's on top of a quarter that saw Slack beat analyst expectations, reporting revenue growth of 60 percent to $168.7 million.

As Teams and Slack continue to grow, it will be interesting to see how the two compete for enterprise adoption. However, in the end, it's unlikely we're going to see any sort of winner-take-all situation here.

"Slack has a strong, passionate user community as well as a large ecosystem of Slack apps to draw on," Cannell told us. And he says ultimately the end-users will have a significant say in which product is used most often.

Dan Thorp-Lancaster is the Editor in Chief for Windows Central. He began working with Windows Central as a news writer in 2014 and is obsessed with tech of all sorts. You can follow Dan on Twitter @DthorpL and Instagram @heyitsdtl. Got a hot tip? Send it to daniel.thorp-lancaster@futurenet.com.

15 Comments
  • i wouldnt be so quick to point out, in an earnings call, that 70% of my users were using office365 if i were the slack CEO. as those 70% are very likely to dump slack sooner or later as stated elsewhere in the article. fact probably is that of course there is room for slack, but mostly in places that view microsoft negatively.
  • It's business volumes, would people choose teams over slack if they had a choice?
  • MS needs to at least copy how Slack allows you to have multiple organisation accounts in the same app. Having to switch between organisation accounts in Teams doesn't cut it.
  • "Adoption rates are still relatively slow for the platform right now, however, I think that as larger Microsoft companies become more confident about their deployments and start rolling out the solution, we'll start to see adoption rates skyrocket," Willis says. "I suspect this will be visible in the next 6 to 18 months, and with Slack and Microsoft going back and forth – as they have been – I imagine that this process will be very visible." I think this is the right take. Many businesses are migrating to Windows 10 and Office 365 if they haven't already. My company is still migrating to Office 365 and Teams is being pushed for where it makes sense.
  • Our staff was hesitant to use Teams initially. Partly because they were used to emailing things back and forth. Partly because they worried that management would have access and read the messages so they would text by phone instead. But now usage is skyrocketing as we pushed the initiative (using it as a bulletin board system; sending group texts for different groups of people; doing group video and audio calls). It's amazing how easy it is to do a call. We've had people accidentally do a group call simply by pressing a button and suddenly 10 people are in a video chat. And the ability to have a phone app means people could separate work texts from personal texts which has become a draw. Plus we emphasized that Teams is HIPAA compliant and said that SMS/MMS was not so they can't send patient info that way.
  • Oh I didn't know teams was HIPAA compliant, that's good to know. I work in health care so that's super important.
  • Unfortunately the company I work for uses neither of these. We are forced to use Cisco Jabber, which is the worst messaging solution I’ve ever used. Hopefully Microsoft can see more penetration in the enterprise.
  • In my opinion, Discord is much more better option.
  • not for a work environment or any non-gaming environment. Discord has an 8-user video call max. Teams can do 50 users in a video call, 100 users in a group chat, etc. Discord can upload files up to 50 MB. Teams can sends files up to 15 GB in size. Staff management is much better in Teams. plus, Teams is cheaper. The free option is better than free option in either Slack or Discord. And the paid version is much cheaper than Slack or Discord.
  • How large is your organization? We’re in the decision process for a new collaboration platform at my org. I was reading up on the specs of both Teams and Slack and it seems like Teams can support a maximum of 5000 users per team. That’s a lot but we’re 3x that size. I wonder if I can connect those teams together.
  • ""Slack has a strong, passionate user community as well as a large ecosystem of Slack apps to draw on," Cannell told us. And he says ultimately the end-users will have a significant say in which product is used most often." I have heard something like this before.
    Netscape Versus Internet Explorer
    Internet Explorer vs Chrome The end users killed Netscape (Netscape did not have an Os)
    The end users are killing Internet explorer (MSFT search engine was weak and No Mobile platform to default it's browser)
    Now to think of what Slack or Teams have/not have that would make or break one of them.
    As it stands, smart money would be on MSFT
  • We started using Teams at our Middle School this year, and the teachers are finding it super easy to learn. We use it a lot!
  • My organization doesn't use any sort of communication app other than email so each department has started using their own apps. Most use Slack, some use GroupMe, and I've gotten mine to reluctantly start using Teams. I'd have to say the biggest obstacle to adoption is the initial difficulty setting up and adding different accounts to the Organization. Slack is way easier than Teams in that regard.
  • For business and organizations, Teams is so much better than Slack. Slack seems too text based and the integration with SharePoint and Office 365 is so useful. Less apps the better and connections that need to be made are the better. I am currently researching into SharePoint and Teams at my job. We are slowly working and testing with others in the organization. I can't wait to have things fully running and being used by everyone in the organization.
  • We're evaluating a new collaboration tool for our org (roughly 15k employees). We're looking at Teams, Workplace and Slack. It looks like the author of the article is using Slack in the screenshots. Are you only testing it or are you using it in your day-to-day? If you're using it day-to-day, what's your rationale for choosing it over other solutions? Why not Workplace or Teams? Teams has the best integrations with Office tools (although it seems the other two are working on improving theirs)