SAN FRANCISCO: Stewart Butterfield, CEO of Slack, the instant messaging platform launched in 2013, believes the pandemic was time for a great workforce reset, to create a future of work rooted in flexibility and better engagement. Slack has over the past few years morphed into the digital headquarters for employee conversations, with return-to-office rates still hovering at low levels and businesses increasingly born and thriving in the cloud.
“It’s very compelling to say that in our universe, we didn’t get to use the office, but we got to use software and they all worked,” he said. Realisation is slowly spreading, he said, about the importance of flexibility, but there is a big disconnect in the tech spending around transformation. “I think we still under-invest across the board in technologies and in the kinds of transformations that are possible across all different functional areas,” he said on the sidelines of Salesforce’s flagship event Dreamforce 2022 held in San Francisco in September.
Salesforce acquired Slack for $27.7 billion last year and it’s expected to contribute $1.5 billion to its revenue in the 2023 financial year. For a fifth consecutive quarter, the number of customers spending over $100,000 with Slack grew by more than 40% year-over-year. Recently, the US National Weather Service roped in Slack as its platform to connect over 4,300 employees with emergency managers, public safety decision-makers and local media partners nationwide. Slack has introduced Huddles that allows teams to chat over audio, providing an option for video and screen sharing with the tap of a button. Some 12 Slack product integrations with Salesforce’s CRM platform, Customer 360, went live at Dreamforce. Slack has over 200,000 paid customers and 77 of the Fortune 100 use the product. In India, Slack has over 120 employees, most of who came through its acquisition of Pune-based technology company Astro.
Asked about competitors like Microsoft giving Teams for free in most Office 365 and Microsoft 365 plans with aggressive marketing spends, Butterfield said there is no real competition to Slack, and noted that most of his customers were also Microsoft customers. “100% of our enterprise customers are Microsoft customers. Of those, the overwhelming majority are Office 365 customers,” he said.
Butterfield acknowledged it’s a challenge with some new customers because Microsoft is offering free plans and companies don’t want to spend money on buying licences. “But once people have some education and some experience in the area, it’s very easy for us to go in and win and coexist happily,” he said. Slack has a free plan with limitations of 90 days of message history, 10 integrations with other apps like Google Drive, and Office 365, and offers one-on-one audio and video conversations with screen sharing.
Slack organises conversations into dedicated spaces called channels. Channels bring clarity to work; one can create them for any project, topic or team.
Asked how employees can have a richer communication experience, without having to react to every channel message, Butterfield said Slack provides the ability to send messages to its users later. “The other part is in change management, or the normalisation of expectations about response time. If you’re working at home, and if you let work completely creep into your home life, you will have no boundaries. I think a lot of people approach it (messages) with the expectation that there will be an immediate response. The intent is, you asked your question, I respond when I want. We both have the flexibility, but it’s on the record. So, people who weren’t even there when the conversation happened, have the history. If we can make more things asynchronous, it really will be transformative for people’s experience,” Butterfield said.