Slack Files IPO, Boosts Security, Partners with Zoom

It was a busy week for chat messaging platform provider Slack, which signaled that it has no intention of ceding the market it helped expand, even though more organizations now have subscriptions to Microsoft Teams.

Slack on Friday filed to sell shares on the New York Stock Exchange in the coming weeks, just one day after holding its Frontiers customer and partner conference in San Francisco to reveal new enterprise-grade management and security features. The company had filed a confidential draft statement back in February.

In its now-public S-1 registration filing with the U.S. Securities and Exchange Commission, Slack reported that 10 million people use Slack among more than 600,000 organizations, though the vast majority use the free version with only 88,000 paying for subscription, up from 59,000 last year. Less than 1 percent of its customers, a total of 575, provide more than $100,000 in annual recurring revenue, which accounts for a considerable 40% of last year’s overall business last year.

Slack’s filing also revealed revenue of more than $400 million for its fiscal year-ended January 31, 80% higher than the prior year. While the company’s losses were $138 million, it’s an improvement over last year’s loss of $140 million, covering just over half the revenue of $220 million.

Experts expect Microsoft Teams to continue to grow and outpace Slack. While Slack is very popular among engineers, technical users and among many younger workers, Microsoft has the leverage that it’s part of Office 365. Microsoft’s army of channel partners that offer integration and managed services for Office and Teams is also an advantage, an area Slack to date largely hasn’t addressed. Customers can buy Slack directly, and the company to date has steered its market expansion efforts toward providing an open platform with strategic ISV partners.

New Features

At its Frontiers conference this week, Slack outlined a number of improvements that aim to narrow the gap with Teams. On the security front, Slack announced its recently released Enterprise Key Management, which provides visibility and control of data by allowing users to bring their own encryption keys; expanded HIPAA support and plans to offer native mobile security controls, including multifactor authentication and data loss prevention capabilities to prevent data exfiltration.

Slack also previewed new features to its platform including the planned Workflow Builder tool set for release later this year, designed to simplify the automation of repetitive processes. The company also showcased improved email integration, including new Office 365 support. Users can now connect to their Outlook Calendar apps to receive and respond to invites, update their Slack statuses and join video calls. It also lets users send emails to Slack “channels” or direct messages with the ability to include attachments. And OneDrive users can share and preview files from Slack and find OneDrive files in Slack search results.

Nevertheless, Slack still has to march forward in the headwinds of Microsoft Teams. Since its release two years ago, Microsoft Teams has surged in usage past Slack, according to various reports, including a recent Spiceworks survey that showed 21% now use Teams versus 15% who use Slack. Moreover, 44% use Microsoft’s Skype for Business, which the company is migrating to Teams. Microsoft, which includes Teams with all non-consumer subscriptions of Office 365, claims 420,000 organizations use the chat messaging tool, with more 150 enterprises that have more than 10,000 employees using it.

Christian Buckley, an Office 365 MVP and expert in Microsoft Teams, and founder and CEO of research firm CollabTalk, said he uses both Teams and Slack, but sees the Microsoft offering as …