Slack targets enterprises to boost paid users
More than 10 million people use Slack every day. But only 95,000 companies pay for the service -- out of the 600,000 organizations worldwide with three or more users.
Slack has been successful so far at converting free users to paid users. Those efforts must accelerate to deliver the kind of financial results public investors will demand. Slack's revenue growth, although still impressive, has slowed over the past couple of years.
The challenge for upstarts like Slack is figuring out how to sell to large enterprises, said Dion Hinchcliffe, an analyst at Constellation Research. Slack has already made some inroads in that market and now counts companies like 21st Century Fox and Oracle among its customers.
But when it comes to enterprise sales, Slack is at a disadvantage against Microsoft, which makes the competing app Microsoft Teams available at no extra cost to users of Office 365, of which there are 180 million.
"I think a lot of people would say that the 800-pound gorilla in the room is Microsoft Teams," Hinchcliffe said. "[Teams] is essentially free, and that's almost an unfair advantage for Microsoft."
Beyond Microsoft, Slack faces competition from Cisco, an established collaboration vendor, as well as tech giants like Facebook, Amazon and Google, which are all testing the waters of the enterprise communications market.
The good news for Slack is it has cash in the bank. With nearly $800 million in reserve, the company opted to forgo a traditional initial public offering in favour of a direct listing, transferring existing private shares to the public market without issuing new stock.
"The way in which they are going public indicates their strength," said Wayne Kurtzman, an analyst at IDC. "I think they have been able to demonstrate to investors they are not a one-trick pony."
source searchunifiedcommunications
Industry: Unified Communications News
