Microsoft Loses Interest In Slack

Microsoft to bolster Skype than acquire Slack.

"If you can’t beat them, you buy them" is the agenda followed by Microsoft Corporation religiously. The top executives belonging to the company have been following this ideology since a relatively long time now. As per a report that was published by Tech Crunch recently, the company had in mind since a relatively long time to acquire Slack, a messaging startup since the company came up with various video and voice calling features.

The tech giant is always looking for lucrative startups that offer the company new horizons for growth. For the same reason, the software behemoth wanted to acquire Slack. However, things seem to be relatively different now since the company does not seem to be interested in the entity anymore.

Slack’s recent service has made it a direct competitor to Skype which is Microsoft’s own video call service. Presently, the service is dominating the market in general. As per the recent trends, Slack is becoming a force to reckon in the market. The service at this point of time has almost 2.3 million active users daily. Amongst these almost 675,000 users are actually paying for the service. This eventually makes the service a potential threat for the enterprise who are looking to make a mark in the enterprise collaboration service industry.

Considering this perspective, it actually turns out to be a no brainer so as to why big tech companies might be interested in the venture. As per TechCrunch, almost eight to ten companies are actually willing to acquire Slack. The Windows 10 giant itself bid $8 billion for the venture. This seems to be a massive premium over the company’s latest valuation of $2.8 billion that surfaced right after a funding round of $160 million that took place in April, 2015.

Mr. Qi Lu, the Executive Vice President of Microsoft’s apps and services was the core person who was pushing the company to acquire Slack. However, all his efforts went down the drain when Chief Executive Officer Mr. Satya Nadella and Co-Founder of Microsoft Mr. Bill Gates waved them aside.

Both these gentlemen were of the belief that instead of buying out Slack to cut down on the competition, the best way to engage the Microsoft users is to increase the productivity of Skype by adding more features and services.

It seems like a relatively sane decision by the company to enhance the features if its own service rather than spending a hefty amount on a new acquisition just to curb on the competition. Healthy competition will help the company in making a significant change to its organizational structure in the long run.

Moreover, the decision by the Co-Founder and CEO also makes a lot of sense since MSFT owns an arsenal of video and voice calling service that is similar to the likes of Slack. The company has acquired and developed strategic partnerships with various firms in the enterprise domain, these companies are Lync, Yammer and SharePoint. However, Slack is great starting point for other giants who wish to compete with Skype.