Strengths
Slack has strong bottom-up and top down appeal, with individuals, teams, and organizations all regarding the software as the preferred "operating system" for a variety of enterprises. No doubt a part of this appeal is the seamless integration of a broad range of third party software with Slack. To date, Slack's App directory features about 1,000 apps for the platform, with support available for both app users and creators.
Simple design concept and ease of use has led to high customer satisfaction. According to Gartner, "more than two-thirds of weekly active users are daily active users, making Slack's usage comparable to the most popular social networks." In order to ensure customer satisfaction, Slack continues to elicit feedback both within the platform, and without, via Twitter.
Growth and Opportunities
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Slack is no stranger to rapid growth. Since its inception, the company has raised $841 million (according to Gartner), $250 million of which coming from an investment from SoftBank in September of 2017. That latest round of investment funding brought the company to a $5 billion valuation last year. Slack has also seen considerable growth in terms of its customer base. Considered by Gartner as the leader in the rapidly growing WSC market, with over 70% marketshare in WSC technology, Slack has seen an impressive rise in daily active users, with a steady continued increase in paid users. As Butterfield mentions in the Bloomberg interview to the right, Slack appears to be the standard in collaboration software, with evidence in the expansion of support offices globally that the company continues to pursue a larger customer base. According to the 2017 SWOT Analysis of Slack Technologies, further opportunities for growth for Slack can be found in expansion of existing accounts, from freemium to paid users, and from Slack Teams to the larger Enterprise Grid option for corporations and larger organizations. Opportunities also lie in the "digital transformation" of existing enterprises, which may in turn attract new customers to Slack. Global growth is also an opportunity, as the company current only supports English, French, German, and Spanish. Slack also has the potential to tap into new markets. According to Gartner, Slack users "come from a diverse set of industries", many of which are augmenting and adapting to the digital age. As an industry that is striving to be on the edge of innovation, education - from the single user as teacher or student, to the largest school district - would benefit greatly from the efficiency and versatility that Slack affords. Cutting edge collaboration software and secure encryption means that Slack could potentially have the capability to meet the needs of learners, educators and larger educational organizations all at once. The software is currently offered to educational organizations at an 85% discount. |
Butterfield on BloombergSlack in Education |
Challenges and Competition
Growth potential also appears to be a challenge the company needs to overcome. Currently, payment options for the product are limited, with online credit card purchases accepted in US dollars, Japanese Yen, euros, and British pounds only. Broader payment options for Slack will be necessary as it pursues global growth.
Another issue for the company as it looks to expand will be that of data storage. To date, the platform operates on an infrastructure stored in the United States, but as the company expands, Slack will need to consider data storage options within the countries of its customers.
Slack's largest competition comes from established and emerging software vendors. Pure-play WSC and UC (Unified communications) vendors will pose a threat to Slack's marketshare, as will large scale cloud office vendors like Google and Microsoft. Microsoft Teams and Skype for Business Online will be a significant competitor for Slack. However, Slack does have first-mover advantage in the market. The extent to which Slack can formulate and execute a next stage business model - based on existing and new client growth - will determine its degree of success over the competition.