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No app-arent winner in the battle of enterprise chat solutions

Over the last two years, chat apps and collaboration tools have made huge inroads into the enterprise. But are these platforms simply a fad, or will they finally succeed in changing enterprise communication and collaboration as we know it? And if it is the latter, who will win the battle for the enterprise?

Slack has already proven hugely popular. The service now has 4 million daily active users, 5.8 million weekly active users, more than 1.25 million paid users, and 33,000 paid teams. A recent Bitglass report found Slack is now among the fastest-growing enterprise cloud services, with at least some use in an estimated 33% of enterprises worldwide.

Meanwhile, the tech giants don’t want to be left out. Microsoft, which previously considered purchasing Slack, introduced Microsoft Teams earlier this month instead, and Facebook released Workplace by Facebook in October.

"Team messaging is currently at the same place as email was for enterprises, businesses and teams 15 years ago," said Bhavin Turakhia, founder and CEO of Flock. "When email just started out it was still a luxury; not many organizations had email. Over time, it has become an indispensable means of communication. Team messaging is heading in the same direction."

Carrie Basham Young is the founder and principal of Talk Social To Me, an advisory firm that helps medium and large companies with their social technology initiatives. In the mid-2000s, Young helped start a company called Socialcast, which launched a Facebook-style social network for enterprises. But Socialcast was ahead of its time, and the tool failed to catch on in a significant way. It was eventually acquired by VMware. Today, enterprises are more ready for such tools than they were in the past.

"Organizations that historically have not used social tools are starting to dip their toe in the water of peer-to-peer collaboration," said Young. "I think that's why we're starting to see more hype in the market and more vendors come into the market. Companies are finally expressing a readiness to give their employees a different choice of tool."

And as cloud computing has taken off, there is less fear of third party vendors, making the time right for these tools to take off.

Winner take all?

The complexity of chat apps, the existing enterprise infrastructures and tools and the capabilities of the products themselves vary depending on the audience. Therefore, it’s unlikely that a clear winner will emerge.  

For example, Workplace by Facebook is all about building an enterprise community — developing a place where employees can read, learn, share, ask questions and get aligned with the other people in their organization. Employees could, for example, broadcast a work-related question to a large audience and get a lot of responses. Microsoft Yammer works in a similar fashion.

Slack and Microsoft Teams are more about enterprise communications. Here, employees are more likely to communicate with people they already work closely with.

The difference between community tools and communication tools is subtle but important, said Young. 

"They can live with each other, they can balance each other out, but I think companies have to realize you can't just launch Slack and think that all your collaboration problems are going to go away," she said.

Instead, it comes down to figuring out what business challenge a company needs to solve, and then determining which app is the best fit.

HipChat is particularly good at blending into the enterprise environment compared to Slack or Microsoft Teams, Turakhia said. 

"[Hipchat] has the advantage of being part of Atlassian, which has many team tools that are used by startups, enterprises and tech companies across the globe," Turakhia said. "They can therefore leverage that existing customer base and bring on HipChat as an integrated product with the other Atlassian products."

Anurag Lal, CEO and president of Infinite Convergence Solutions, agrees that the most obvious leaders aren’t necessarily going to run away with the big prize. Lal feels there is also room for new contenders to steal the enterprise business if they focus exclusively on the needs of the enterprise.

"Slack, for example, wasn’t created with the enterprise in mind," said Lal. "It started as a gaming platform that accidentally became an enterprise solution. Therefore, security and scalability were not features that were top of mind."

"The organizations that are going to succeed in this arena are those whose products are specifically built for mobile, extremely secure, highly available and scalable, and do not contradict or undermine the integrity of workplace communication for their own self-interest," Lal said. 

Plenty of room

Given the vast number of chat apps and enterprise collaboration tools now available, as well as growing desire for such products, experts predict there will be several big winners in this space.

"I expect the market to shake out to 6 or 7 major players potentially and the entire market will be divided amongst them," said Turakhia.

But to succeed, chat app providers need to respond to businesses.

"They must ensure that they are delivering a true business solution that drives value and helps enterprise engagement with the intent of increasing productivity," said Lal. "If they’re able to do this well, then enterprise customers would naturally leverage these products. If these products aren’t able to deliver, then it would feel too forced, which often isn’t a successful scenario."

For companies, success with these tools means thinking about the problem they want to solve and ensuring employees share that vision, because as Young says, if no one uses the tool a business chooses, then none of it matters anyway.

"You can't just launch a chat app tool without sharing the purpose behind it," said Young. "The strongest piece of advice that I would give to any company is to have a purpose and clearly articulate it before you launch. Otherwise, you'll be set up for failure, and we've seen that happen time and time again."

Filed Under: IT Strategy Software
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