Slack Technologies, founded by Stewart Butterfield in 2009, is a company offering an alternative way of operating a firm’s business online. The platform organises a company’s agenda into “Channels”, allowing individual users to correspond with relevant team members. The technology aims to shift the structure of conversations, stemming away from more traditional forms, such as emails.

Slack distributes its technology to a platter of high-profile companies, including the BBC, Target and Deliveroo. Amazon has also begun operations on Slack, earlier this year. In 2019, the company commenced trading, on the New York Stock Exchange, through a direct public offering (DPO) structure. Initial shares reached $38.50, exceeding the original guide price of $26 and valuing the company at £24 billion by the end of the day. However, as a relatively new enterprise, Slack is yet to make a profit.

Furthermore, the company faces tough competition from rivals such as Microsoft’s Teams, Zoom or Cisco Webex. In July 2020, Butterfield’s team made a bold move against Microsoft, filling a competition complaint against the tech giant. Slack accuses Satya Nadella’s company of violating EU Competition Law through compulsory downloads of Teams, alongside Office 365 packages; blocking its removal as well as making some functions inoperable with different software. The EU Commission now has to investigate the claims before a formal antitrust probe is initiated.

How has the pandemic impacted Slack?

Companies offering a mobile work environment have seen consistent growth during the pandemic. Slack had a strong start to the year, ending its last quarter with a 49% rise in revenue. However, evaluations show that the company’s growth will decelerate in the current quarter. The predicted revenue of ($222-$225) million would only result in a 32%-33% increase year-over-year. In comparison, Zoom’s revenue grew by 355% in Q2, and the video-conference business is predicted to end its fiscal year, with around $2.38 billion.

The disappointing trend may be the result of Slack’s primary motives - altering the way people work and not adapting to a remote working environment. Moreover, as companies struggle economically, and attempt to cut additional costs, Slack may find it hard to attract new clients.

Nonetheless, the predicted slowdown does not erase Slack’s accomplishments for 2020. The company is expected to end the 2021 fiscal year with an elevated revenue of ($870-$876) million. This result would result in a growth of 38%-39%, year-on-year.

by Zuzanna Potocka

Slack: A Company Analysis

How has the pandemic impacted Slack?