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Slack CEO Says Microsoft Teams Can’t Meet the Need of Some Fortune 100 Companies

Slack's CEO says some big enterprises are still choosing it over teams due to its superior user experience. Meanwhile, its earnings surpassed analyst expectations, but stock price still fell.


CEO Stewart Butterfield used the company's earnings reports to fire shots at Teams. After losing $0.14 per share, equating to a year-on-year improvement of 58%, the company beat analyst's expectations.

Butterfield said part of the improvement was due to the signing of a large enterprise customer, highlighting an unnamed Fortune 100 financial services firm.

“Of course, like most of our large enterprise customers, they run on ,” he said. “They still chose Slack because only Slack was capable of meeting their needs. Increasingly, in regulated industries, we are seeing significant traction because Slack delivers security and compliance with scalability, an open platform and a great user experience.”

The company in question reportedly added thousands of users to its plan. Overall, Slack saw a paid user boost to over 100,000, a 37% increase from the previous year.

Dipping Stocks

However, despite its success, Slack's stock is down 5.19% in the past 24 hours. Butterfield wasn't as confident about the company's future, agreeing that there were a lot of challenges from , , and Teams. He predicts a loss of 8 to 9 cents in the coming quarter, more than analyst expectations of 7 cents. Slack's stocks have steadily declined from its high of $38.50 per share, which was achieved shortly after its public launch.

Butterfield previously downplayed the threat of Teams to Slack, comparing Microsoft's tactics to Google+ and noting Bing's lack of success.

Tens of billions of dollars into that [search engine] and I don't know what their market share is now — 9% or something like that,” he said in July. “If the competition was based on the quality of user experience, and that's where all the effort is, that would probably be more daunting for us.”

This is a sentiment he echoes in the earnings call, telling investors that Slack is unable to win over customers via a bundle of products and will instead continue its focus on user experience.

Despite Microsoft's Teams late entry to the market, recent numbers suggest it has usage than Slack. In June, the tech giant revealed it has 13 million daily active users, while Slack previously stated 10 million. In 2020, Teams is set for another user boost as it replaces Skype for Business as the platform of choice for enterprise chat.

Ryan Maskell
Ryan Maskellhttps://ryanmaskell.co.uk
Ryan has had a passion for gaming and technology since early childhood. Fusing the skills from his Creative Writing and Publishing degree with profound technical knowledge, he enjoys covering news about Microsoft. As an avid writer, he is also working on his debut novel.

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