Facebook Sees Paid Subscribers For Workplace Rise 40% But It Remains Far Behind Microsoft's Teams

Facebook Inc FB said Tuesday the number of paid subscribers for its enterprise communication software Workplace has jumped 40% to reach 7 million subscribers, compared to a year ago.

What Happened: Workplace and its bigger rival, Microsoft Corp MSFT-owned Teams, have seen a major uptick in user demand as the global pandemic pushed up work from home.

Facebook’s Workplace had 2 million paid subscribers in October 2019 and saw the number rise to 5 million by May 2020, a jump of about 67%.

Corporates use Workplace, Teams and Slack Technologies’ WORK namesake enterprise software to enable internal communication.

Workplace, which counts AstraZeneca Plc AZN, Starbucks Corp SBUX among its clients, was rolled out by Facebook in 2016.

Why It Matters: In terms of pricing, Facebook's Advanced tier costs $4 per user each month, while the Enterprise tier is $8 per user per month. 

See Also: Microsoft Teams Adds 475% Daily Active Users In About A Year

Teams offers a free version with limited capabilities, a basic version that comes at $5 per user a month, a standard version priced at $12.50 per user a month and an enterprise version at $20 per user a month.

Microsoft Teams is currently miles ahead of the competition with an estimated 145 million daily active users as of April, up more than 93% from 75 million in April 2020.

Slack claimed 12 million daily active users in September 2019 and has since stopped revealing the statistics. 

The COVID-19 pandemic shot up the need for remote collaboration tools. With the vaccination rollout and as the economies gradually reopen, corporates are still finding stickiness and growth for these tools.

“In markets where employees have returned to the workplace, including Australia, China, New Zealand, South Korea, and Taiwan, we have seen usage continue to grow,” Microsoft CEO Satya Nadella told analysts last week in a post-earnings call.

“And the number of organizations with more than 1,000 users, integrating their third-party and line of business applications with Teams has increased nearly 3 times year over year.” 

Price Action: Facebook shares closed 1.31% lower at $318.36 on Tuesday.

Photo Courtesy: Facebook