Microsoft has Slack in its sights, offers its Teams chat for free
Let the battle of business chat begin.
The chat service you use at work may soon be changing.
Microsoft is making its Teams business-chat app available for free to entice small and medium-size businesses to try it out.
The free tier will allow up to 300 people to take advantage of many of the paid-for service features, including searching back through messages, in-line translation, audio and video chat, the ability to work with other apps, 10 gigabytes of shared storage and 2 gigabytes of personal storage per person. Microsoft said people can start signing up for the new, free version starting Thursday.
Microsoft's Teams has a lot of Slack's features and runs on many of the same devices that Slack does. Now it's free like Slack too.
Microsoft's move to offer Teams for free nearly two years after its launch may seem like a forehead slapping omission, especially since its main competitor, Slack, already offers a free version of its service.
That's part of what makes Microsoft's move noteworthy. While chat outside the business world has coalesced around services like Apple's iMessage, Google's Hangouts, Microsoft's Skype and Facebook's Instagram, Messenger and WhatsApp, the business world has only begun to discover chat apps in the last few years.
Email is still the most popular form of communication among employees, according to surveys by Technalysis Research. Voice calls and texting rank second and third, followed by instant messaging, which represents just 8 percent of communications among employees.
With so few companies using the new business chat apps, Bob O'Donnell, president of Technalysis Research, said that both Slack and Microsoft have plenty of people to win over.
"While there is competition, they're selling to different businesses," he said. "There's an opportunity for both of them to do their thing."
The difference in approach between Microsoft and Slack in particular is rather stark. Slack courts its free users to upgrade to the paid service, whereas Microsoft has used the popularity of its Office software to attract people to its Teams service. As a result, Slack is perceived as a more popular product among startups and young companies, O'Donnell said.
Microsoft's decision not to offer a free version of Teams initially was a signal of indifference to startups, which may also already use Google Docs and other non-Microsoft tools. "That is a big part of the discussion," O'Donnell said.
So now, Microsoft is embracing free too.
"This new offering provides a powerful introduction to Microsoft 365," Ron Markezich, corporate vice president of Microsoft 365 Commercial, said in a statement. In other words, Microsoft is hoping to flip those Google Doc-using businesses by getting them to embrace Teams first.
Taking care of business (chat)
It's hard to overstate how central chat is to the internet.
One of the first things I ever did on the internet was to chat. At first, it was trading messages over the static-sounding connection with a friend's PC and modem. Then it was through Prodigy, AOL Instant Messenger, Yahoo -- and now iMessage.
It's no surprise then that the idea of business chat has propelled companies like Slack to superstar tech-industry status. Slack had raised $841 million as of late last year from investors like SoftBank, Accel Partners and Index Ventures, valuing it at more than $5 billion.
Slack's not the only high-valued chat app either. When Facebook bought the text messaging replacement service WhatsApp in 2014, it paid more than $19 billion. That was among the largest tech acquisitions ever.
In the tech industry, which is obsessed with productivity, Slack in particular has become a cultural touchstone among startups and tech-focused media companies.
Microsoft joined the fray in 2016, five years after it bought Skype -- another popular app used for chat. Microsoft named its new product Teams, and you'd be forgiven for needing to squint to tell the differences with Slack. It has direct messages like Slack, you can have chat rooms like Slack, you can share files like Slack, and you can even share GIFs to lighten the mood, just like Slack.
A price tag -- or lack thereof -- was the main difference. Slack has always had free version, with some restrictions such as how much message history you can search.
Now that Teams can compete more directly with Slack, the next step will be to convince the techno-hipsters to give it a shot.
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