If 2020 was the year of the video meeting, 2021 could be the year when the apps that went mainstream during the crisis cement their position at the centre of working life.
In this race to remake work in the shadow of the pandemic, there is no one more ambitious than Microsoft. That could make Teams, its communication and collaboration service built on top of Office, the software company’s most important new product for years.
According to Satya Nadella, Microsoft’s chief executive, Teams is on its way to becoming a digital platform as significant as the internet browser, or a computer operating system.
Speaking in an interview with the Financial Times, he called the cloud software a new “organising layer”, pulling together all the tools a worker needs into a single place, as well as acting as a platform for other developers to deliver their own services. The result: collaboration tools, video meetings, chat and other business applications, all reached through a single user interface.
If the world of work has not seen anything quite like it before, there is at least one parallel in the consumer sphere. “In China, WeChat is the internet, that’s a great example,” Mr Nadella said. “There isn’t a western equivalent. If anything, Teams is probably the closest when it comes to the work area.”
The Microsoft chief’s enthusiasm is understandable. Teams — along with apps from companies such as Zoom and Google — acted as the digital glue that kept many businesses operating in 2020. The number of daily active users of Teams jumped to 115m by the end of September, from 13m in the middle of 2019.
On a single day during the third quarter, users of Teams spent 30bn minutes — an average of more than four hours per person — doing things like participating in video conferences, working on shared documents and reviewing meetings. Given how long it normally takes new enterprise software to take hold, that makes Teams virtually an overnight success, and an important new front door to digital working life.
Microsoft “wants the captive portal through which you experience everything else,” said Jim Gaynor, an analyst at Directions on Microsoft, an independent research firm. “They have tried this repeatedly. Teams is the closest they’ve come to it sticking.”
Creating a single “workspace” like this is also an echo of Microsoft’s ambitions from its days of PC dominance, said Wayne Kurtzman, an analyst at IDC: “This was the original promise of Windows — we’ve gone full circle.”
‘They’re iterating fast’
Teams hardly looked like a breakout hit before the pandemic. It was first developed to compete with Slack, a pioneering workplace chat app that threatened to make inroads into Microsoft’s grip on information workers. Then, as the pandemic took hold, video took over as the main driver of Teams’ growth.
Microsoft’s focus is now shifting to making Teams a channel through which users access its Office apps. It is also promoting it as a platform for other developers, enabling a new generation of lightweight apps it hopes companies will build as they refocus entire work processes around Teams.
Slack’s agreement a month ago to be bought by Salesforce was one sign of the headway Microsoft has made. The $27bn price tag was a huge win for Slack’s shareholders, but also an admission that its path to becoming a leading power in the software world had been blocked. Zoom, the breakout software sensation of 2020, now faces a similar challenge as Microsoft pours its efforts into video meetings.
“They had Slack in the gunsights and now they’ve declared victory,” said Art Schoeller, an analyst at Forrester. “It’s very clear: now they’re paying attention to Zoom and iterating very fast.”
Microsoft’s critics claim the company has resorted to aggressive tactics familiar from before Mr Nadella took over as chief executive in 2014. That included offering Teams as a free add-on to Office, making it a natural choice for any organisation that already pays for the widely-used productivity tools.
“It’s the Microsoft playbook, run again and again and again: bundle and disintermediate,” said Mr Schoeller. “Slack had nowhere to go.”
The company’s business tactics suggest that Microsoft has also “gone back to being a bit more cut-throat” after presenting a gentler face to the world under Mr Nadella, said Mr Gaynor. The lightweight apps, for instance, could circumvent the gatekeepers in corporate IT departments, helping Microsoft grow its business but creating the kind of “shadow IT” companies try to resist.
Meanwhile, critics such as Slack and Salesforce accuse Microsoft of trying to create a “closed” software platform that keeps users tied to its own services, in contrast to the more open one they are trying to build.
“I think they should probably look at themselves in the mirror before they shoot their mouth off,” Mr Nadella shot back. As an open platform, Windows was instrumental in helping companies such as Slack find a market, he said, while rivals are free to integrate their services with Microsoft’s own.
Jared Spataro, head of the Microsoft 365 service, said the company has no choice but to let customers integrate their other applications into Microsoft’s services. “Many companies have a heterogeneous approach and that’s just the reality, so we have to be open for our own existence,” he said.
Beyond the ‘knowledge worker’
The question now is how big a springboard the pandemic year of 2020 will prove to have been for Teams, as well as its main rivals.
When the health crisis recedes, work will look different from the way it did before, Mr Nadella claimed. Employees will demand more flexibility in where and what hours they work. That will require a mix of what he calls “synchronous and asynchronous” software tools in a single package: real-time meetings, tied in with collaboration and messaging tools that let people work in their own time.
“I think that there will be structural change,” he said. That will require software tools that give workers flexibility “while still building social capital [and] building knowledge inside the enterprise by bringing people together on important tasks.”
For Microsoft, drawing workers to use Teams could increase engagement with the company’s other apps and make customers less likely to switch. It could also open up new opportunities “way beyond the traditional market for knowledge workers, which has been our history,” Mr Nadella said.
Top of his list: so-called “front line” workers in industries such as retail and healthcare who do not currently use Microsoft Office, but who perform functions that could be tied into wider work processes inside their companies through Teams.
Deeper engagement in a cloud-based service like this, meanwhile, could produce another boon for Microsoft: a wealth of data unavailable to its competitors. With a view across the daily working habits of millions of workers, it would be in a strong position to develop new digital services, as well as finding new ways of making money, said Mr Gaynor.
It will also be able to study “key behavioural indicators”, added Mr Kurtzman at IDC, learning how people use the new generation of cloud-based collaboration software and what makes them most productive.
Microsoft is already working on ways to feed managers’ insights into how their digital workforces are operating, said Mr Spataro. But he said that would not include information on individuals, only aggregate data. “We never want to create a surveillance tool,” he said.
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Microsoft looks to make 2021 the year of Teams - Financial Times
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