Microsoft vs. Zoom: Butterfield Claims Microsoft is Prioritizing Zoom's Demise

Slack's Integration with Salesforce: A Discussion at TechCrunch Disrupt 2021

During TechCrunch Disrupt 2021, Stewart Butterfield, the founder and CEO of Slack, and Bret Taylor, the COO of Salesforce, engaged in a discussion regarding their $28 billion merger, finalized last December and recently approved by the Department of Justice. Despite regulatory clearance, some shareholders continue to express reservations about the deal’s potential value.

Shareholder Concerns and Salesforce's Perspective

Specifically, the performance of Salesforce’s stock, remaining relatively stable over the past year, has fueled doubts regarding the benefits Slack provides. Taylor, however, appeared unfazed, emphasizing that substantial acquisitions often require several quarters for shareholders to fully grasp the strategic reasoning and observe successful integration.

Salesforce has recently begun integrating Slack features into its own platform. A new feature, called Clips, enables users to record video messages, including screen recordings, for colleagues. Slack continues to prioritize asynchronous communication, as highlighted by Butterfield, who explained that these videos are searchable via automatically generated transcripts.

Butterfield's Future and Past Experiences

A key question remains regarding Stewart Butterfield’s long-term commitment to Salesforce. Having already achieved significant financial success, he confirmed that the acquisition agreement did not include any earn-out provisions.

Butterfield’s previous experience with larger corporations has been less positive. Following the sale of Flickr to Yahoo, he promptly departed, citing feelings of being marginalized. He later described how innovation at Flickr stagnated under Yahoo’s control – a company notably affiliated with TechCrunch.

Despite this history, Butterfield affirmed his intention to remain with Salesforce.

Motivations Beyond Financial Gain

Slack’s initial public offering in 2019 had already proven successful for investors, employees, and Butterfield himself. Consequently, financial considerations were not central to the merger negotiations. He believes the acquisition provides a robust platform for achieving greater impact.

Competition with Microsoft Teams

A persistent concern centers on the competition from Microsoft Teams, which has experienced faster growth than Slack. Butterfield previously characterized Microsoft’s approach as an “unhealthy obsession” with eliminating Slack.

However, Butterfield downplayed this threat during the discussion. He indicated a lack of detailed knowledge regarding a complaint Slack filed with the European Commission, alleging anti-competitive practices by Microsoft. He stated that the matter is now under investigation.

Shifting Focus: From Slack to Zoom

Butterfield suggested that Microsoft’s competitive focus has shifted from Slack to Zoom over the past year or so. He believes Teams doesn’t directly compete with Slack in the same way.

He noted that Slack boasts over 1,000 customers who spend $100,000 or more annually, representing substantial enterprises. These customers are frequently existing Microsoft and Office 365 users, often utilizing Teams primarily for video conferencing.

Butterfield playfully remarked that he maintains a friendly relationship with Zoom founder Eric Yuan and, while not wishing ill on Zoom, believes Microsoft views eliminating Zoom as a prerequisite to successfully challenging Slack.

https://www.youtube.com/watch?v=VCFzWH-pcmU