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Slack CEO On Microsoft's Teams: 'Not A Competitor'

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Slack CEO On Microsoft's Teams: 'Not A Competitor'

Microsoft Corporation (NASDAQ: MSFT) mentioned its Teams business dozens of times during its post-earnings conference call, but Slack Technologies Inc (NYSE: WORK) CEO Stewart Butterfield said on CNBC that it's "not a competitor."

What Happened

Microsoft mentioned Teams 42 times during its conference call, which was more than its cloud business Azure, CNBC's Deirdre Bosa said Thursday. When asked if Butterfield is worried about the growing competition, the Slack CEO said Microsoft has spent the better part of three years bundling its Teams business and giving it away for free.

Over the same time period, Slack's client list rose, including those that generate at least $100,000 in revenue. As such, he said anyone assuming Microsoft will "kill" Slack is a "puzzling" proposition.

In fact, Microsoft is likely "frustrated" that only 29% of its Office users make use of Teams, which implies the other 71% of users "have said no thank you," he said.

Why It's Important

The work-from-home phenomena as the result of the coronavirus may have accelerated the digital transformation and adoption of software for business productivity, the CEO said. One recent example is Slack adding ViacomCBS Inc (NASDAQ: VIAC) as a client at a time when the two entities are still working on the challenging process of merging together.

At the same time, the two companies need to maintain effective communication to run day-to-day operations ranging from new hiring onboarding, employee performance reviews, among others.

What's Next

Slack announced in early April its intentions to raise $750 million in part because it doesn't "know how bad things are going to get" moving forward, Butterfield said. The raise is part of an "offensive" strategy to pursue potential acquisitions and take advantage of softness in the advertising market.

Slack's stock closed at $26.69 per share.

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