If anyone was in any doubt, we learned last week how deadly serious Microsoft is about making a success of Teams. The raft of enhancements announced mid-week not only caught up with but swept past the best of what pureplay web meeting rivals are offering. This doesn't mean Microsoft just won the battle to dominate the digital teamwork landscape — we'll explore below why it still has a ways to go before it can declare victory over the likes of Slack, which revealed intriguing news of its own — but it sent a powerful message about its intent.
Just a few weeks ago, Microsoft was still playing catch-up to the functionality offered by fast-growing video meeting pureplay Zoom. Its latest announcements show that Teams is no longer a fast follower, but instead is setting the pace for the entire market. The new Together mode, which uses AI technology to digitally place participants in a shared background, is an impressive innovation to meet the needs of users currently struggling with the cognitive overload of the video meeting format.
There were other fresh ideas too, including on-screen chat bubbles and emoji reactions, AI-powered dynamic optimization of how Teams shows participants and shared content, speaker attribution for live captions and transcripts, video filters, and an extension to check up on how call participants are feeling. As my colleague Derek Du Preez commented in his coverage of the news, much of this puts a welcome focus on the ‘soft' engagement features of online collaboration.
While Microsoft has been able to tap into its AI resources to lift the Teams user experience, Zoom's best brains are still preoccupied with its ongoing efforts to address security and privacy shortcomings in its service. Nevertheless, the video conferencing pureplay had announcements of its own, unveiling hardware-as-a-service options for customers who want to adopt IP telephony handsets or conference room systems on a monthly subscription basis. The move is designed to bolster its IP telephony offering for the enterprise market, and was accompanied by news that ITSM and enterprise workflow vendor ServiceNow is now a customer for Zoom Phone. Zoom returned the favor by outlining how it's using ServiceNow workflow and customer service products in its own operations.
But it was Microsoft that stole all the pizazz last week, seizing the initiative with new features that not only outflank Zoom but also pre-empt future enhancements slated for Cisco Webex. Although Webex doesn't attract the same media attention as Zoom, it's an established incumbent in the enterprise accounts that Microsoft Teams targets. While Zoom had put these powerful incumbents to shame with its ease-of-use, they're now fighting back with AI-powered capabilities that may prove challenging for Zoom to emulate. Despite its own announcements, it was not a good week for Zoom.
Building the ecosystem
But as I've mentioned on several occasions, productive digital teamwork relies on much more than video meetings. Away from the headlines generated by its new Together mode, Microsoft has also been striking a significant number of partnerships and integrations with best-of-breed work management vendors in recent weeks.
Last month Asana introduced a Teams integration, similar to its existing integration to Slack. Last week knowledge sharing platform Guru, a close partner of Slack, announced its Teams integration, as did team collaboration platform Monday.com. These alliances have added digital teamwork capabilities into Teams that aren't available natively — though perhaps Microsoft plans to develop similar functionality for itself in the future. In the meantime, building out its partner ecosystem helps embed Teams into the richer collaborative canvas of digital teamwork that we see forward-looking enterprises starting to build.
Meanwhile Slack — whose CEO Stewart Butterfield was doing the rounds of the news channel studios last week explaining that Microsoft isn't actually a competitor — announced a new direction for its messaging platform with its acquisition of Rimeto. This is a SaaS startup with a new take on company directories, which pulls together information from existing enterprise systems including HR, applicant tracking, CRM and so on. The Rimeto app turns all this disparate information into a searchable staff directory where each individual profile shows not only their name, title and contact information, but also who they work with, key projects they're working on, their skills and experience, and which location they work out of.
The value for Slack is that, given that its platform is designed to enable cross-functional teamwork across a distributed workforce, people need a tool like Rimeto to help them find the right team members and then get to know who they're working with. Slack plans to integrate Rimeto's functionality into its own app, but says it will also continue to sell the Rimeto app standalone.
My take #1 - why Slack bought Rimeto
Why is Slack adding HR functionality into a messaging app? Readers who are familiar with all eight components of diginomica's collaborative canvas model for enterprise digital teamwork will understand the logic of this move. As well as serving all four modes of collaboration — messaging, content, in-app and workflow — four other crucial components of the canvas provide sync, search, permissions/privacy and identity/talent. It's in the realm of identity and talent that HR and teamwork intersect — adding an understanding not just of who each person is, but also what they bring to the team.
This human dimension of identity and talent is already important when connecting team members within an organization of any significant size, but Slack's horizon extends beyond the boundaries of a single enterprise, particularly since the recent introduction of multi-org shared channels, branded as Slack Connect. The Rimeto technology will provide a standardized mechanism for exchanging team member profiles within the Slack Connect infrastructure that's independent of whatever HR and other systems each separate organization is using internally. That's going to be an important contributor to team cohesion in these extended team structures.
My take #2 - Microsoft vs Slack
As Ben Thompson wrote in his Stratechery blog last week, Slack's strategy is focused on these horizontal connections across enterprise boundaries, in contrast to Microsoft's vertical connections across messaging, content and certain applications and workflow within the boundaries of an enterprise.
Thompson is absolutely right to pick up Satya Nadella's take last year that today's operating system (OS) doesn't run on a single machine in the way Windows does, but instead "abstracts all the hardware in your life ... that’s really what our pursuit of Microsoft 365 is all about." The sudden investment in new functionality for Teams is all about furthering that pursuit. The collaborative canvas of digital teamwork is becoming, to borrow the strapline of Microsoft's new partner Monday.com, the WorkOS for enterprise. That's why I've been banging on about collaboration as the fifth pillar of enterprise applications in the cloud since 2013 — and tracking the vendor battle for domination as the category has evolved.
Thompson's take is that "while Microsoft is busy building an operating system in the cloud, Slack has decided to build the enterprise social network." While I don't disagree with his analysis, my take has a different emphasis. Even if Microsoft's strategy is "in the cloud," the most important distinction from Slack is that the strategy is still enterprise-centric. This is why Teams remains the no-brainer choice if you're already standardized on Office, Azure and other parts of the Microsoft portfolio. But it's also why going all-in on Teams isn't quite the same as being all-in on the cloud as it operates today. Microsoft's 365 OS is built to serve a vertically integrated enterprise.
Slack's strategy, in contrast, is network-centric. In a networked world, connection across enterprise boundaries is just as important as connection within a single enterprise — often more so, if it provides faster access to better and/or cheaper resources. This is the principle of frictionless enterprise, another enduring theme of mine, which holds that in a connected world, the traditional enterprise is forced to unbundle existing structures and repackage them in new, more connected patterns.
In this world, the ability to connect across enterprise boundaries — and therefore necessarily deal with a heterogenous landscape of applications and datasets — is the direction to bet on. By the way, that's also why I've been intrigued by the emergence of the MACH Alliance, an new industry group that promotes an architecture for that technology landscape. But as with all disruptive directions, it's not the easy choice and will often seem alien to those more used to the traditional approaches that have served so well in the old world. New ways of working are here to stay, but getting used to them will be a long and winding road.
I'm sure that Microsoft knows that it has a fight on its hands and its decision to bring so much new functionality to Teams — while continuing to expand its ecosystem — demonstrates it will do everything it can to retain and build its market share in the collaboration space. But as the incumbent it has a large customer base of established enterprises whose needs are necessarily more rooted in the old ways of working than the new. Slack's advantage is that its customer base skews towards those organizations that are determined to change and thus adapt to new ways of working more suited to a digitally connected world. Microsoft has shown it can see off the threat from Zoom. Seeing off the threat from Slack will prove a lot trickier.