Slack partners with Amazon to take on Microsoft Teams

Slack is partnering with Amazon in a multi-year agreement designed to make its communications app more inviting to enterprises. The deal comes just like Slack faces increased competition from Microsoft Teams, and it’ll see Slack migrate its voice and video calling features over to Amazon’s Chime platform. Voice and video conferencing is really a particular weak spot of Slack compared to Microsoft Teams, but this new integration should mean it will be vastly improved later on.

While Slack has long used Amazon Web Services (AWS) to power parts of its chat app, it’s now committing to using Amazon’s cloud services as its preferred partner for storage, compute, database, security, analytics, machine learning, and future collaboration features. The deal means it’s unlikely we’ll see Slack turn to Microsoft’s Azure cloud services to power parts of its service in the future.

Amazon is also planning to roll out Slack to most of its employees as part of the deal in an enterprise-wide agreement. It’s not straight away clear just how many of Amazon’s 840,000 employees will undoubtedly be using Slack, though. Up until today, Slack’s biggest customer has been IBM, which is rolling out Slack to its 350,000 employees.

Illustration by Alex Castro / The Verge

Slack and Amazon are also promising better product integration and interoperability for features like AWS Chatbot, a service that pushes out Slack channel alerts for AWS instances. In the coming months, Slack and AWS will improve its Amazon AppFlow integration to support bi-directional transfer of data between AWS services and Slack channels.

All of the integration points and Slack’s embrace of Amazon were created to make the chat app a lot more appealing to enterprise clients. Slack has been steadily growing its enterprise business, despite Microsoft’s big push with Teams recently. It’s a point that CEO Stewart Butterfield has been keen to stress in recent interviews, even though he thinks Microsoft is “unhealthily preoccupied with killing” Slack.

“The future of enterprise software will be driven by the combination of cloud services and workstream collaboration tools,” says Butterfield in a statement today. “Strategically partnering with AWS allows both companies to scale to meet demand and deliver enterprise-grade offerings to our customers.”

It’s a deal that will benefit both Amazon and Slack. Amazon gets an important partner for AWS and its Chime platform, and Slack gets the reliability and security of AWS with an improved voice and video calling service underpinning its service.

The partnership also speaks to the core of how Slack has managed to win businesses over. Slack has opted for partnerships and integrations with many different rival pc software and cloud providers, and hasn’t always attempted to build those features in to its own app. Slack CEO Stewart Butterfield touched on the value of the integration in a wide-ranging interview on The Vergecast last month.

Slack’s main rival, Microsoft, can also be trying to entice developers and improve app support in Microsoft Teams, however the company’s tightest integrations continue to be the Office suite of Outlook, Word, Excel, PowerPoint, and more. Microsoft has also been bundling Teams as part of its Office 365 subscription, tempting businesses to use the communications software over Slack along with other rivals.

Slack’s approach seems to be working, especially for organizations that aren’t as reliant on Microsoft’s productivity apps. Slack reported its earnings today, revealing significantly more than 122,000 paid clients, an increase of 28 per cent year over year. Over 750,000 organizations are actually using a free or paid subscription plan, up from 660,000 at the end of the last quarter.

Butterfield describes Slack’s recent quarter as “phenomenal,” with 50 percent revenue growth year over year. Slack broke a user record in March, just like many organizations started to order employees to work at home amid the ongoing coronavirus pandemic. “We believe the long-term impact the three months and counting of working from home will have on the way we work is of generational magnitude,” says Butterfield. “This will continue to catalyze adoption for the new category of channel-based messaging platforms we created and for which we are still the only enterprise-grade offering.”

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