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Why Workplace Instant Messaging Is Hot Again

Chat is almost as old as the internet itself. But this year, investors and big tech companies alike treated workplace messaging as the next big thing.

Slack announced a $250 million investment in September from Japanese tech company SoftBank, bringing its total funding to $790 million and boosting its valuation from $3.8 billion to $5.1. In June, rumors surfaced that Amazon wanted to buy the company for as much $9 billion.

Meanwhile, Microsoft launched a new chat app called Teams that will eventually replace Skype for Business. Atlassian, the company behind the venerable workplace messaging app HipChat, launched a new service called Stride. Indian billionaire Bhavin Turakhia invested $45 million of his own money into Flock, a Slack competitor he founded1. Facebook added video to its business tool Workplace.

It may seem weird to pour so much money into old-hat tech. But the real point of these new applications isn’t just to build the a better way for employees to send text-based messages. It’s to build a platform for the next generation of business software.

Microsoft Windows became the main platform for the desktop era of computing, while the Apple’s App Store and the Google Play Store became the platforms for the mobile era. Now, much of the tech industry believe that gadgets like the Amazon Echo and apps like WeChat and Facebook Messenger are ushering us into the era of the “conversational interface,” and companies both old and new hope to grab control of this new territory.

The idea is that in the future, you’ll do much of your work from inside your chat app, rather than switching back and forth between different apps. You might file your expense reports, respond to customer support inquiries, or check sales figures all from an instant messaging client.

“Think about how many workflows in your day-to-day are centered around human interaction,” says Microsoft Teams Platform program manager Larry Jin. “We’re trying to bring those together. It doesn’t make sense to have some of them appear in chat and some of them to appear in some other context.”

Slack is trying to hasten the conversational future by investing a portion of its funding haul in companies that build applications atop Slack. VP of product April Underwood says Slack has invested in 24 different companies, including workplace polling tool Polly, meeting coordination tool Donut, and knowledge management tool Guru. Meanwhile, the company’s app store for software that runs on Slack has attracted more than 1,000 apps. Underwood says that within minutes of launching the Slack app directory in 2015, developers told her they already had customers.

Many companies are hedging their bets, however. Video conferencing company Twine Labs, which Slack invested in, is also building apps for Microsoft Teams, Facebook Workplace, and Amazon Chime, says CEO Anthony Claudia.

Microsoft, meanwhile, is taking a slightly different approach. In addition to Teams, which competes directly with Slack, it offers Microsoft Bot Framework, a platform for building chat-based apps that can run not just on Teams, but on Slack, Facebook Messenger, and other instant messaging services. Even if your company picks another tool for messaging, Microsoft wants to be the technology that underpins the apps you end up using.

The workplace chat is growing rapidly. Slack now boasts 50,000 paying customers. Microsoft bundles Teams with the Office 365 for no extra cost, and the company announced earlier this year that 125,000 organizations use the software. In October, Facebook announced 14,000 organizations are using Workplace. IDC analyst Wayne Kurtzman says this is just the beginning. Right now, many teams within companies use tools like Slack for free, often without official approval from their corporate IT departments. “Most companies do not have a corporate collaboration solution in place,” he says. “We’ll see a lot more governance and integration into the workplace.”

But so far there’s no “killer app” to drive adoption of conversational interfaces. Asked about breakout successes on the Slack platform, Underwood cites companies like Donut and Polly. But while those may be useful tools, they hardly represent a paradigm shift on the level of the computerized spreadsheet or the BlackBerry.

Skepticism is already growing. An informal survey of startup founders conducted by First Round Capital pegged chatbots and conversational UIs and the third most overhyped technology of the year. It wouldn’t be the first time a much hyped new paradigm fizzled out. Only a few years ago, workplace social networking apps like Yammer, which Microsoft acquired for $1.2 billion in 2012, launched their own “app stores” with dreams of becoming the next big platform. Now, with the rise of real-time chat, most of those apps are all but forgotten.

Underwood is unperturbed. “We’re in the midst of a multi-decade shift,” she says. Investors, however, might not be eager to wait that long.

1 *CORRECTION at 11:30am ET on 12/22/2017: Bhavin Turakhia founded Flock. An earlier version of this article incorrectly stated that his brother had founded the company. *


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