Amazon.com (AMZN -2.12%) has been aggressive about breaking into the grocery market, the content market, and, soon, could disrupt the pharmaceutical market. But it's strangely quiet in the area of online messaging systems -- such as slack -- that companies use to facilitate employee teamwork.
Messaging app Slack is the most well-known workplace messaging application. Founded in 2014, Slack already has 9 million weekly active users.
Eager to win a share of the market, Alphabet (GOOGL -0.71%) (GOOG -0.78%), Facebook (META 0.43%), and Microsoft (MSFT -1.75%) have all released Slack competitors. However, Amazon is curiously absent from the lineup and could be missing out.
Slack has taken over the workplace messaging systems. Image source: Slack.
Slack competitors pop up in the large-cap tech world
The near-instant popularity of Slack has caught the attention of a number of large-cap tech companies.
Alphabet's Google announced in February that it was ready for the release of its Slack competitor called Hangouts Chat that will work seamlessly with its range of G Suite apps, including Drive, Sheets, Docs, and Slides.
Last October, Facebook said that its one-year-old Slack competitor called Workplace hit 30,000 business users, up from 14,000 six months earlier. Microsoft is also jumping in the game with its one-year-old Microsoft Teams messaging system.
Despite the fierce competition from large companies that have money to throw around, Slack is managing to hold its own. As of September, Slack boasted 6 million daily active users with 2 million of them being paying customers. Slack also said it was up to 50,000 paying teams, including notable start-ups and established companies such as AirBnB, Buzzfeed, and Oracle.
In October, Facebook claimed its Workplace service had 30,000 business users but didn't specify how many were paying customers. Microsoft is closer to catching up to Slack after announcing in March that its Teams service was used by 200,000 organizations, up from 125,000 in September.
However, Microsoft has a loyal user base that it can continue to market to. That's because Microsoft Office 365, which hosts Workplace, has 120 million business users. Incidentally, Amazon also has a loyal base of users through its Amazon Web Services (AWS) business that it could easily market a messaging service to.
Where's Amazon's Slack competitor? Does it matter?
Workplace messaging systems must at least be on Amazon's radar considering it showed an interest in actually acquiring Slack last summer, Bloomberg reported. At the time, it would have been a $9 billion sale, sources told Bloomberg. That was the last time Amazon was reported to be interested in entering the workplace messaging world.
Having a Slack competitor is important for any company like Amazon or Microsoft that sells enterprise services because it can help boost the package of offerings that companies sell to clients.
A Slack competitor could further boost business for AWS, which saw sales increase 43% year-over-year last quarter to $5.1 billion. AWS currently claims 34% of the cloud market share, followed by Microsoft with 13% of the market share, according to Synergy Research Group. That means that just as Microsoft has marketed Microsoft Teams to its Office 365 users, Amazon could market a Slack competitor to its AWS users and instantly gain a user base.
Amazon is missing out on valuable relationships by not offering a much-needed service. Microsoft Teams already boasts big-name clients, such as Accenture and Alaska Air Group. And Facebook Workplace is used by a host of established companies, including Delta, Starbucks, and Walmart. Having a workplace messaging system is an extra selling point these tech companies have to show potential clients when selling a suite of services. And it's helping them develop business relationships with wealthy companies that could spend money on other services that pop up in the future.
Slack is a stand-alone service, but its sharp rise in users and valuation proves that workplace messaging systems are in high demand. Following its Series G funding round in September 2017, Slack boasts a $5.1 billion valuation, up from $3.8 billion at its previous funding round in April 2016.
The fact that Amazon was poking around a Slack acquisition last summer means the company is at least aware of the potential value a workplace messaging system could bring to AWS. While Slack is the top dog in the space at the moment, Amazon has proved time and again that it can swoop into a space and change up the rankings, almost overnight. With 34% of the cloud market under its belt, Amazon could easily claim some of Slack's market share if it decides to enter the space.
