Main content

Meta gives enterprises a year to leave Workplace, suggests they move to Zoom's Workvivo

Phil Wainewright Profile picture for user pwainewright May 21, 2024
Summary:
Meta pulls out of the enterprise teamwork market with the news that it's shutting down Workplace and recommends customers migrate to Zoom subsidiary Workvivo - what's really going on?

Image for Workplace-Zoom story -  Two women with surprised faces look at a laptop screen in the office
(© Antoni Shkraba - Canva.com)

Facebook owner Meta last week signaled the end of its venture into enterprise SaaS with the surprise announcement that it is retiring Meta Workplace, its enterprise collaboration platform, from August next year, with all data wiped nine months later. The rival to Slack, Microsoft Teams and other messaging-first teamwork platforms has gained a loyal customer base including the likes of AstraZeneca, BT, Deloitte, McDonald's, Nestlé, Starbucks and Walmart, and reached seven million paid subscribers in May 2021, the last time Meta published numbers. In a boost for video meetings platform Zoom, Meta has chosen Workvivo, which Zoom acquired just over a year ago, as its "only preferred migration partner."

We spoke to Gideon Pridor, CMO at Workvivo, to find out more about the arrangements it has made for the migration and what it has to offer existing Workplace customers — we'll come to what he told us in a moment. But first, let's dig into the history of Workplace and the circumstances leading up to Meta's decision to pull out of the enterprise collaboration market. We also spoke to Julien Codorniou, an 11-year Facebook veteran and Vice President of Workplace until late 2021, when he left to become a partner in VC firm Felix Capital. In a lengthy post on LinkedIn last week, Codorniou reflected on Meta's decision to sunset Workplace, suggesting that its demise came down to a failure to invest sufficiently in the product for the enterprise market. He wrote:

The best SaaS companies out there are run by dictators who talk to customers every day and turn this into a roadmap and then ARR. It's a muscle that's not easy to build coming from the B2C world. You can't do enterprise SaaS as a side gig ...

Ultimately, we did not manage back then to convince the Facebook LT [leadership team] to invest properly in the growth of Workplace.

The remarkable loyalty that Workplace earned from customers — and the passion of the Workplace team — stands out in the many comments to that LinkedIn post, with enterprise adopters from AstraZeneca, Danone, Petco, Reckitt and many others testifying to its ability to break down silos and connect across all levels of the workforce.

Why did Meta retire Workplace?

So why has Meta decided to retire such a proven and much-loved product? A product that is so integral to Meta's own operations that the company will continue to use Workplace internally, even after stopping it for its enterprise customers. "It's part of the culture. Facebook would not work without Workplace," Codorniou tells me.

Originally introduced in January 2015 in a beta release as Facebook at Work, the product was officially launched as Workplace from Facebook in October 2016. Combining familiar Facebook features such as News Feed, Groups and Messenger, it was the brainchild of Lars Rasmussen, the co-founder of Google Maps who had then gone on to co-create Google Wave, the search giant's experimental and short-lived collaboration product. The team he then formed at Facebook, based in London, drove the creation of the social media giant's first attempt to target businesses, and quickly found unexpected success selling to large enterprises. From Codorniou's LinkedIn post:

It became an enterprise, Fortune 500-heavy, frontline-friendly business by accident. We thought only tech companies would use Workplace, until Clay Johnson, back then CIO of Walmart, told us he wanted Workplace for 100% of their employees (1.3 million back then). When the Fortune 1 calls, you listen and behave.

The attraction for companies like Walmart and Starbucks, another early adopter, was that Workplace could be used by workers that had never sat in front of a computer because they spend their working day on their feet, serving customers or operating machinery. Despite growing competition from Slack, and later Microsoft Teams, the familiarity and ease of the Facebook user experience meant that Workplace could reach workers that these other products struggled to engage. This gave its customers an edge, as Codorniou tells me:

Workplace found that market by accident. Feeling part of a community is a competitive advantage - that's because we found the frontline workers.

With the advent of the pandemic, this ability to reach across the enterprise had a further leveling effect, with frontline workers suddenly no less connected to top management than home-based knowledge workers. Workplace's paid user count rose 40% in those heady days for the digital teamwork market. It should have paved the way to even greater things — but the platform needed investment to keep pace with the rapid feature evolution being pursued by rivals. Intrigued by the opportunity, outside investors were ready to fund a spinout of Workplace as a separate venture, according to a Techcrunch report at the time. But Meta wasn't ready to take that step, and by the end of 2021, Codorniou and other key team members had left the organization.

A year later, the parent company, now renamed Meta, declared what CEO Mark Zuckerberg dubbed its 'Year of Efficiency', with a warning that the company would be "more proactive about cutting projects that aren’t performing or may no longer be as crucial." In May that year, it sold off Kustomer, a CRM company that it had bought a year prior for $1 billion, signaling that B2B SaaS was one of those less crucial areas. It was only a matter of time before Workplace followed a similar fate, but the decision to close down the service has nevertheless come as a shock to customers. We approached Meta for comment, and received the same response as other publications. A spokesperson told us:

We are discontinuing Workplace to focus on building AI and metaverse technologies that we believe will fundamentally reshape the way we work. Over the next two years, we will provide our Workplace customers the option to transition to Zoom's Workvivo product, Meta's only preferred migration partner.

Why choose Workvivo?

Zoom would appear to be the big winner from this turn of events. Its Workvivo subsidiary, while not at the same scale as Workplace, has a similar enterprise customer profile, including the likes of discount store chain Dollar General, airline Ryanair and leisure-to-telecoms conglomerate Virgin Group. But Meta's endorsement doesn't extend to a transfer of contracts — while the two companies are working closely to build a migration framework to help customers move across, Workvivo will have to earn the trust of each Workplace customer, and there are plenty of other options available in the market. Pridor concedes that some will go elsewhere:

We will lose deals. They might be deals that they prefer somebody else that has a desk company DNA, they want a traditional intranet, and it's only an IT decision and we might lose that. But there is a very high correlation, when you look at the big brands using Workplace successfully, and what Workvivo has.

Rather than starting from a traditional intranet or desk worker background, Workvivo was founded — and attracted seed funding from Eric Yuan, Zoom's CEO — to approach the market from an employee communications angle. It has achieved particular success with the same type of frontline workforce that Workplace was able to reach. That's one of the reasons why Meta chose Workvivo as its migration partner. Pridor explains:

Workvivo, in this marketscape, would be the only one company that shares their vision in having an open communication, engagement-led platform, with a UI that is very much focused on community and giving people a voice, on flattening traditional communication barriers, and letting the CEO speak to everyone right here, as well as people responding with the necessary levels of governance.

That's very different compared to a lot of the other tools. It would either be a nicer UI intranet, with maybe a like button, but a very different philosophy, or a frontline tool that is focused on streamlining operations — shift management, task management — and might have a feed. So [Workvivo] was a natural transition to what they sold to their customer.

The other factor is Workvivo's Zoom parentage, which he argues provides more stability and enterprise validation than venture-funded competitors. He says:

[Meta] don't want their customers — and their customers are very afraid of — going through another turmoil like this. So [they're] looking for confidence and future readiness. With Zoom backing us up, it puts us in a very unique leadership position in this market, not only from the ability to execute and all that, but also when you look at our roadmap. The two platforms, Zoom and Workvivo, [will be] increasingly converging, giving you one place for collaboration and engagement, synchronous and asynchronous, desk and frontline, all in one client. We have more and more stuff like that coming out from the roadmap to production every month or two. So it gives a very good story for companies, knowing where this is leading. It's more future-proofed and connected to the wider Zoom collaboration platform story.

What can Workplace customers expect?

When customers move across, Pridor feels confident that they will also be impressed by Workvivo's customer service. He adds:

The one thing that would stand out above everything is going to be the customer service framework. It's part of our DNA, we're built like that. That's what customers usually rave about. We get an unusual amount of natural customer advocacy and love online from huge companies. They're going to feel that. It's going to be a very good landing.

It's not just a matter of data transfer and technical integration. There's also a significant role for change management. He goes on:

When you are in our space, you're not selling only software, it's a whole experience. They have all their content, their vibe, the culture in there. There is a big human component that needs to be taken into account in order to roll this out successfully.

Customers will also find features that Workplace hasn't provided, including intranet functionality such as app launchers, document management, a wiki, and other internal communication tools. Workvivo will soon be adding employee engagement measurement, too. Customers typically consolidate functions into the platform that currently exist as separate applications, as Pridor recounts:

We replace three, four, five and six tools or services in customers that we start serving. Not only tools, but hundreds of existing mini-sites built on Drupal or Wordpress that need to be maintained, secured, worried about, a lot of shadow IT — WhatsApp, FaceTime, scheduling shifts, and having unmanaged groups.

The platform message is also a bet on where the market is headed. He adds:

For some years, we've been talking about the emergence, the rise, of this huge platform market that is happening, which is the employee experience platform that we think doesn't start in a resource management intranet. It's a part of it. It starts where people engage. It starts in engagement and communication, where people connect, feel, get recognition — our number one used feature on the platform. Get a message from the CEO, collaborate in a group asynchronously.

On top of that, because customers asked for it, and we're the only tool that their employees are actually using, we added more and more functionality — intranet, document management, app launchers, stuff that are necessary. This is happening. In two or three years, it won't be about if you have an employee experience platform, it will be about which one.

Being part of Zoom plays an important role here:

To get one tool where you get the best conference video meetings, you get Zoom chat with all of its functionality that is very robust today. You get whiteboards, you get clips, you get a scheduler, you get a Swiss Army knife of any collaboration tool out there in one place. And you toggle between that and the softer part of cultural engagement, announcements, podcasts, whatever that might be... That offering together with Zoom, collaboration and engagement, synchronous and asynchronous, [customers] are going to feel that if they use the whole thing together, which we offer, and nobody else is even in that vicinity today.

My take

Workplace will be mourned by its loyal enterprise customers. As Codorniou told me, it is "one of the few examples where the best product didn't win." Unfortunately, Meta's leadership never gave it the backing that it needed to truly succeed in what became a highly competitive marketplace — one phrase in his LinkedIn post stood out for me: "You can't do enterprise SaaS as a side gig."

Another phrase that's pertinent here comes from a company insider who spoke to Techcrunch at the time Meta refused to sell Workplace to outside investors. Having an enterprise SaaS business with a separate revenue stream and customer base from its consumer-facing activities, they said, "helps make Facebook [and Meta] look like an adult." Shutting down Workplace — while keeping it on for internal use — makes Meta look much more like a spoilt child. Whatever its future hopes for AI and the metaverse, it has now burned its bridges with the enterprise market, where buyers have long memories.

Meanwhile, Zoom's purchase of Workvivo now looks like a very astute move, so long as it can prove its worth to departing Workplace customers and achieve the migration of a significant share of installed base. In retrospect, it now appears to be a very good thing that Zoom didn't get to buy contact center vendor Five9 last year after all. I never felt that focusing on the call center market was the right call, when the much larger market of enterprise digital teamwork beckoned. With Workvivo now poised to gain further heft with the addition of at least some of the Workplace customer base, Zoom now has a chance to aim for a market-leading role in the Collaborative Canvas of enterprise teamwork.

Loading
A grey colored placeholder image