Slack works with Amazon in a multi-year contract that means all Amazon employees will use Slack. The deal comes about when Slack is facing increasing competition from Microsoft teams and Slack will migrate its voice and video calling capabilities to Amazon's chime platform in addition to broader adoption of Amazon Web Services (AWS).
Thanks to a company-wide agreement, Amazon's introduction of Slack is an important part of the business for all employees. However, it is not immediately clear how many of Amazon's 840,000 employees will use Slack. To date, IBM has been Slack's largest customer, introducing Slack to its 350,000 employees.
While Slack has long used AWS to power parts of its chat app, it is now committed to Amazon's cloud services as a preferred partner for storage, computing, database, security, analytics, machine learning, and future Use collaboration features. Because of the agreement, Slack is unlikely to contact Microsoft's Azure cloud services or Google Cloud in the foreseeable future to operate part of its service.
"We didn't use Azure," said Brad Armstrong, vice president of business and corporate development at Slack, in an interview with The Verge. "The vast majority of our service has always been done with AWS." According to Armstrong, Slack is "unlikely" to use Azure in the future.
Illustration by Alex Castro / The Verge
Switching to Amazon Chime for Slack voice and video calls is also an important part of the business. Voice and video conferencing are a particular weak point of Slack compared to Microsoft Teams. However, this new integration should mean that it will be significantly improved in the future. Slack has already started migrating and is currently reviewing new features. "Right now, we're just focusing on supporting the backend," says Armstrong. "Since Chime has additional features, we want to switch the mobile experience to video, which is no longer the case today." We also deal with transcription. "
Slack and Amazon also promise better product integration and interoperability for features like AWS Chatbot, a service that issues Slack channel alerts for AWS instances. In the coming months, Slack and AWS will improve their Amazon AppFlow integration to support bidirectional data transfer between AWS services and Slack channels.
All of these integration points and Slack's acceptance by Amazon should make the chat app far more attractive for corporate customers. Slack has continued to grow its business, although Microsoft has made great efforts with teams recently. It's a point that CEO Stewart Butterfield wanted to highlight in the recent interviews, even though he believes Microsoft is "unhealthily busy killing Slack".
"The future of enterprise software will be determined by the combination of cloud services and workstream collaboration tools," said Butterfield in a statement today. "Through the strategic partnership with AWS, both companies can scale to meet demand and offer business deals to our customers."
It is a deal that will benefit both Amazon and Slack. Amazon gains an important partner for AWS and its chime platform, and Slack gets AWS reliability and security through a better voice and video calling service that underpins its service.
The partnership also speaks for the core of how Slack managed to win over companies. Slack has opted for partnerships and integrations with a large number of competing software and cloud providers and has not always tried to integrate these functions into its own app. Stewart Butterfield, CEO of Slack, discussed the value of this integration in a comprehensive interview on The Vergecast last month.
Slack's main competitor, Microsoft, is also trying to lure developers and improve app support in Microsoft teams. However, the tightest integrations of the company are still the office suite from Outlook, Word, Excel, PowerPoint and more. Microsoft has also bundled teams as part of its Office 365 subscription to entice companies to use the communication software with Slack and other competitors. Microsoft teams have recently reached 75 million active users a day, a huge leap even from the bump at the start of the pandemic.
Slack's approach seems to work, especially for companies that don't rely so heavily on Microsoft's productivity apps. Slack today announced its profits and revealed more than 122,000 paid customers, an increase of 28 percent over the previous year. Over 750,000 companies are now using a free or paid subscription, compared to 660,000 at the end of the last quarter.
Butterfield describes the last quarter of Slack as "phenomenal" with sales growth of 50 percent over the previous year. Slack broke a user record back in March when many companies started hiring employees to work from home amidst the ongoing coronavirus pandemic. "We believe that the long-term impact of the three months and counting work from home on our way of working is generational," says Butterfield. "This will continue to catalyze acceptance for the new category of channel-based messaging platforms that we have created and for which we are still the only offering for businesses."
Update, June 4, 5:55 p.m. ET: Article updated with comments from an interview with Slack.