A Microsoft security exec explains how its Teams workplace chat app market is benefiting from a major shift in how companies buy cloud software (MSFT, WORK)

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A Microsoft security exec explains how its Teams workplace chat app market is benefiting from a major shift in how companies buy cloud software (MSFT, WORK)

Category : entrepreneur

The spotlight for workplace chat software this year has been focused on Slack, the buzzy startup that went public in June in an unusual direct listing and has had a bumpy ride on the public markets ever since.

Microsoft, meanwhile, has been quickly and steadily growing Microsoft Teams, its own chat app, built in to the Office 365 suite. In July, Microsoft said that Teams had 13 million daily active users, compared to the 10 million that Slack disclosed in January, and that Teams is growing faster overall. (Importantly, neither company has given more current numbers since those dates.)

Girish Chander, group program manager of Office 365 security, says that Teams is benefiting from the fact that it’s both included in and integrated with the rest of the suite, which includes cloud versions of Microsoft mainstays like Word, PowerPoint, and Excel.

More specifically, Chander says, Microsoft Teams — and Office 365 as a whole — have benefitted from a larger shift in the market.

As the software market first began moving to the cloud in earnest a decade or so ago, there emerged a trend towards what Chander calls “best of breed.”

Where before, customers would get the lion’s share of their software from a few major vendors, the cloud meant that it was suddenly easy to cherry-pick whatever software they thought was best for a particular job— whether it came from titans like Microsoft, Google, or Salesforce, or smaller players like Slack, Zoom, or Atlassian.

Now, though, Chander says that as IT departments and CIO offices are faced with an incredible proliferation of options in the cloud software market, that best-of-all-worlds approach actually becomes a series of headaches.

“What I hear these days is, you know, that’s a nightmare to manage,” says Chander.

‘Best of suite’

That “nightmare” has led customers back towards pre-integrated software suites, like Microsoft Office 365, says Chander, as those same IT pros and CIOs look to simplify the task of securing and managing their cloud software. Chander calls this approach “best of suite,” and says that Microsoft is benefiting greatly from it.

This approach has become especially appealing amid a broader awareness amongst customers of the very real risk of cyberattack, Chander says. That goes double for businesses in regulated industries like healthcare, which have to comply with the HIPAA standard — not to mention that companies in the EU have to comply with GDPR.

“The importance customers give to security and compliance is through the roof,” says Chander.

This is something that leads customers away from services like Slack, and towards Microsoft Teams, in Chander’s view. While both apps offer integrations with outside services, Teams naturally boasts deeper integrations with the rest of the Office 365 suite.

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That’s good for users, considering many workers already use Office 365 in their daily lives, but Chander makes the case that it’s good for the IT department, too, since Microsoft itself can vouch for the security and integrity of business data as it flows into and out of Teams.

“The suite-wide view is a clear advantage for us,” says Chander.

The Microsoft graph

Chander also cites the sheer amount of data Microsoft has access to as another important boon. Called the Microsoft Graph, it’s the aggregated data on how Microsoft’s cloud products get used — useful, in a security context, to know when a corporate Office 365 user isn’t quite acting like themselves.

If a user based in Montana is suddenly logging in from Berlin, for instance, and accessing files that they’ve never, ever touched before, it might be a signal that something is wrong.

Slack might take issue with Microsoft’s view of the market. When the company announced its first-ever quarterly earnings earlier this month, CEO Stewart Butterfield said that while most of its business customers use Office 365, they were still going out of their way to use Slack.

“Of course, like most of our large enterprise customers, they run on Office 365,” Butterfield told analysts on the earnings call, speaking of a “Fortune 100 financial services firm” which is also apparently a major Slack customer.

“They still chose Slack because only Slack was capable of meeting their needs. Increasingly, in regulated industries, we are seeing significant traction because Slack want security and compliance with scalability, an open platform and a great user experience,” Butterfield said.


About Author

Sammy Singh

Global VC, Founder, and entrepreneur extraordinaire as featured in Inc. Magazine, Bloomberg, and Forbes. Sammy Singh is a graduate of UCLA and Wharton School of Business as well as a former student of Loyola University of Chicago. Sammy is best known as a renowned financial technology global entrepreneur and has founded over 26 different firms across industry and all over the world. He is a venture capitalist,a TV/ Film actor, tax specialist, and marketing solutions strategist. Connect with Sammy Singh on social media below!

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