Slack Acquires HipChat Following Increased Competition From Microsoft

Posted on July 26, 2018 by Mehedi Hassan in Cloud with 5 Comments

Slack today announced its partnership with Atlassian, the makers of HipChat. The company is acquiring Atlassian’s HipChat and Stride products as part of the partnership.

Atlassian will discontinue HipChat and Stride as part of the partnership, moving users to Slack. The company is also investing in Slack’s business. Slack is providing HipChat and Stride users with tools to seamlessly migrate to the company’s service. The company’s product competed directly with HipChat and especially Stride in the past, but it’s always been ahead in the market. Stride was Atlassian’s modern take on competing with Slack, though the firm seems to have accepted defeat, entering the new partnership with Slack.

As part of the partnership, Slack will introduce better integrations for Atlassian’s products like Jira Server and Cloud, Trello, and Bitbucket to better support HipChat and Stride users. “Over the past year, however, the market in real-time communications has changed pretty dramatically. And throughout that change, one product has continued to stand out from the others: Slack,” Atlassian said in a blog post.

With more than 500,000 organizations using Slack, the firm is ahead of Microsoft Team’s 200,000. Slack only has 3 million active paid users, though, which is likely much lower than Microsoft Team’s paid users. Keep in mind, Microsoft only recently started offering a free version of Teams. Redmond has millions of users using Office, and I don’t think it will be too difficult for the firm to lure in customers to use Teams.

Either way, competition in the market for team communication services has increased significantly in recent times. While Slack has been ahead of the market for years, recent competition from Microsoft presents a huge challenge for the company. With Microsoft investing heavily on Microsoft Teams with things like the recently announced free version of Teams, Slack will need a ton of work to continue leading the market. Facebook also just acquired an email-based team communication app earlier today for its team communication platform, so the market is moving faster than ever before.

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