Slack’s life as an underdog darling of Silicon Valley ended on November 2nd, 2016. That’s when the upstart communication startup published an open letter to Microsoft in The New York Times, offering the tech giant an insincere “welcome” to the world of workplace chat software. The occasion was Microsoft’s launch of Teams, a Slack clone that would come bundled with the company’s popular Office 365 suite of products.
In its letter, Slack warned Microsoft that “Slack is here to stay,” adding, “We’re just getting started.” But the 4 million users it had at the time would increase to just 12 million four years later, while Microsoft — which added Teams to its 365 bundle without increasing the price — took Teams from zero to 115 million users.
That disparity helps to explain why Slack sold itself this week to Salesforce. The deal, which values Slack at $27.7 billion on revenues of $833 million over the past year, has largely been greeted with cheers. (Ben Thompson offers a typically excellent rundown of the opportunity here for both Salesforce and Slack.)
WAVES OF CONSOLIDATION ARE LEAVING PEOPLE WITH FEWER REAL CHOICES
But it also feels like the end of an era, one where workers gained new power to bring their own tools to the office and decide for themselves how they wanted to get work done. Slack first succeeded with small teams who wanted to accelerate their work and was often dragged into organizations by early adoption. But today, waves of consolidation are leaving people with fewer real choices.
The rise of smartphones in the early 2010s brought with it a new surge of workplace productivity tools that made mincemeat of everything that had come before them. Box and Dropbox brought easy file storage and sharing. Evernote introduced the idea of ubiquitous, cloud-synchronized note-taking. Sunrise created a more social calendar, while Mailbox and Acompli reimagined email for the mobile phone.
Slack tiptoed into the conversation in the middle of the decade and almost immediately became the fastest-growing enterprise software tool of all time. In 2015, just 18 months after it launched, Slack reported having more than 1 million daily users — a figure then unheard of in enterprise software.
It had a great backstory — a last-ditch pivot from a failed video game called Glitch — and, in Stewart Butterfield, one of the tech world’s most charming founders. It also had a bold pitch: it was going to “kill email” — or, at the very least, reduce your reliance on it — and it would do so by integrating hundreds of other services into real-time work chat, creating a kind of all-knowing command console for your organization.
The company embodied the belief, so common in Silicon Valley, that the best product would win in the end. “Building a product that allows for significant improvements in how people communicate requires a degree of thoughtfulness and craftsmanship that is not common in the development of enterprise software,” the company wrote in its open letter to Microsoft. “How far you go in helping companies truly transform to take advantage of this shift in working is even more important than the individual software features you are duplicating.”
I HATE THAT THIS WAS THE OUTCOME FOR SLACK
And yet, if there’s a lesson of the past four years, it’s that thoughtfulness and craftsmanship only got the company about 10 percent as far as Microsoft did by copy-pasting Slack’s basic design. In its open letter, Slack famously told Microsoft: “You’ve got to do this with love.” In 2020, looking at Slack’s size, the idea seems laughable. What’s love got to do with it?
The thing is, I hate that this was the outcome for Slack. I love good productivity tools and was rooting for Slack to someday become as good as the company hyped it up to be. (And perhaps it still will: like most giants, Salesforce has a mixed track record when it comes to the success of its acquisitions, but some seem to be thriving. When I asked about this on Twitter, people had a lot of good things to say about post-acquisition Heroku.)
But Slack’s struggle to succeed as an independent company sadly mirrors that of many one-time innovators in enterprise productivity. Mailbox died, and Acompli sold to Microsoft where it became the mobile Outlook app. Evernote is a pale shadow of its former self. Of that early cohort, only Box and Dropbox became — and still remain — public companies.
Why is this the case? To get some insight, I called up Aaron Levie, Box’s affable CEO. In Levie’s telling — and he also wrote a blog post about the Slack acquisition — it all comes down to sales. The idea that workers would someday choose all their own tools was always a fantasy, he told me, in part because most workers don’t even want to think about their tools. In such a world, the winning app will almost always be one with a giant, er... salesforce behind it.
Microsoft had one. Slack didn’t. Enter Salesforce.
“The reality with the enterprise is that you can have the best product, but that’s not good enough,” Levie told me. “You need distribution. And what Salesforce has — they have the procurement officers, they have the finance people. They have all of the apparatus you need to interact with to sell software, and they have it for the top 100,000 corporations around the world.”
Levie is bullish on the acquisition because it puts Slack and Salesforce on more even ground.
“The only advantage Microsoft has is distribution, and so now they’ve neutralized the advantage that Microsoft has had,” he said. “All of a sudden, they can actually fulfill the ultimate promise of the opportunity, because they have 10 times the amount of salespeople that can go distribute this thing into corporations around the world.”
SHOULD SLACK’S SALE DIMINISH OUR EXPECTATIONS FOR AIRTABLE OR NOTION OR CODA?
Assuming Levie is right — and I wouldn’t bet against him — that means the medium-term future of work is increasingly a choice between three giants: Microsoft, Salesforce, and (in a distant third) Google. And with that, the golden age of worker choice in productivity tools seems to be coming to an end.
That’s not to say that the incumbents won’t always face new challengers. But I wonder whether the low ceiling that Slack turned out to have has implications for some of the other fast-growing productivity companies of the current moment. Should Slack’s sale diminish our expectations for Airtable or Notion or Coda? Don’t get me wrong — I’m confident their investors will all get their money back, and then some — but do they have a real future outside the arms of a monolith?
If not, then the productivity market will become as consolidated as any number of other spaces on the internet, from app stores to search engines to social networks. And as our government antitrust regulators begin to awaken after a long period of hibernation, I wonder if they’ll have anything to say about it.