Jul
12
Microsoft leans into 'teams,' the tech giant's answer to Slack



Microsoft revealing some new data today about its workplace messaging software teams and how it holds up to rivals like slack let's get to Josh Lipton in San Francisco with more on this hey Josh Melissa teams is Microsoft's response to slack and Sachin Adela's company just released some big new stats showing its traction saying that the team's service now reaches more than 13 million daily active users ahead of slacks last reported number 10 million in the three months ended on January 31st Microsoft providing this chart showing the growth Microsoft remember includes teams in its office 365 bundle at no additional charge as for slack it made his debut on the New York Stock Exchange on June 20th surging about 50% on its first day but even before this news was down about 10% since then the company can't comment due to quiet period restrictions but worth noting when it reported results back in June it had 645 paid customers with over $100,000 in annual recurring revenue an 84 percent increase from a year earlier and that large customers accounted for 43 percent of total revenue it also stresses how engaged its users are for example it's noted in the past that on a typical workday paid customers average more than 90 minutes using the product so bottom line is Microsoft a slack Slayer da Davidson's Rishi Joe Lauria doesn't think so he says slack does have strengths of its own a strongly liked product unique features it's the tech industry's favorite communication tool he says and it's a neutral platform meaning it's designed to work well with any tool whether that's from Microsoft Google or Salesforce and Joe Lauria still considers slack a possible takeover target – if CEO Stewart Butterfield is willing to sell he says Melissa back to you all right Josh Thank You Josh Lipton in San Francisco Dan how deep is slack's moat well I think it's deep among that tech community but when you think about where Microsoft is and you think about the transition they've had to the business to the cloud over the last you know five six years since Satya Nadella has really taken over you say to yourself they have thousands and thousands of customers that are already there and they can just upsell them this new product but slack I think to Josh's point or whoever the analyst he was quoting if Google didn't have this regulatory issue I think they'd be buying slack and they'd put Stewart Butterfield ahead of their enterprise division and build out G suite and build out all this sort of stuff that's coming to a theater near you I think when these guys have the government off their backs a little bit I mean Microsoft will LinkedIn I would think would be a natural mean absolutely right it could I think this looks really bad for slack and the reason I say that is they've already passed them in terms of the numbers 13 million versus 10 million right so I mean that's part of the issue but I think they've got all the money in the world to be able to throw it if they want to they can offer it out there as part of the rest of the package and it kind of reminds me of the days of when Zuckerberg was sitting there and tried to buy snap they didn't want to sell so what did he do we got Instagram he immediately attacked and then he went on the offensive there and he's absolutely won that war I think Microsoft's is the same decision now and by the way when slack gonna make money they don't make any money when's it gonna happen it's like uber it's like a lot of these names where how long into the future how much money are they going to be burning while everybody's waiting for them to make money it'd be profitable dan makes a good point in terms of swiping out an issue that we talked about in the first block of the show and that is you know are the giant tech companies are they handcuffed from doing these acquisitions which would have been run-of-the-mill acquisitions in another time but now they can't do it there they're gonna be looked at it's too big but doesn't matter ISM in the case of Microsoft doesn't matter I mean they've already turned their boat around you know two and a half three years ago for an alphabet for it Google is a different animal I think and Google's paying for that in terms of its multiple in terms of the stock performance over the last six to nine months but Microsoft getting back to what Pete said quickly they report on the 18th of July Pete said again cow initiated today with an outperform $150 price target yeah that might be the case but you know you're looking at it and you said it I mean valuation you're getting close to 29 times next year's earnings you probably have I don't know 13% EPS growth at what point is this stock expensive I think it's getting well it's one of the reasons why I think Microsoft has to blow slack out of the water because if you think about I think significant part of our business is commoditized and his enterprise and there's a ton of competition there so why not have this be an extra you know kind of piece of that enterprise package that sets them apart they don't need a violin you you you