Apple, GoPro, Instagram, Netflix—and now, Slack. Some companies not only dominate their market but inspire true affection from their users. How popular is group messaging app Slack? Twitter is plastered with messages in which people literally proclaim their love using the company’s Twitter handle. “@SlackHQ have I told you lately that I love you?!” reads one post. “Then my heart exploded. Marry me,” reads another.
This outpouring for Slack—which replaces annoying, never-ending, reply-all emails with real-time group text chat—is a bit curious since Slack is pretty similar to popular apps that preceded it, notably HipChat, the previous darling of developers, startups, and small businesses before Slack launched publicly in February 2014. For most people, though, Slack is their first chat app. It seems to have arrived at just the right time, when companies were adopting group chat en masse. “A lot of times, we’ll ask customers what they were using before Slack,” says Bill Macaitis, Slack’s chief marketing officer. “And the most common answer is: nothing.”
It’s not just lucky timing, though. Slack has a crisp, friendly design and a disarming Apple-like playfulness—for example, the entertaining quotes it displays on launch, like “Alright world, time to take you on!” It also integrates smoothly with dozens of other apps and services, which many fans cite as its top appeal. Fast Company named Slack one of the Most Innovative Companies of 2015. And there are real numbers behind Slack’s success. According to Slack’s latest reported stats, from August, 1.25 million people use the service each day, and 370,000 have paid accounts.
The potential market for group messaging is enormous—in theory, as big as the current market for email. “I communicate through company email about 0 times a day now thanks to @SlackHQ,” reads another typical tweet about Slack.
In a market so vast, there are plenty of other companies challenging Slack for a piece of the pie. Some started overseas; ChatWork, founded in 2011, is the biggest group chat app in Asia, with 70% market share on its home turf of Japan, according to an independent study by Fuji Chimera Research Institute. Japanese telecom giant KDDI is one of ChatWork’s 80,000 client companies. It’s now spreading in the U.S.; ChatWork’s special offering is an integrated group task manager that can turn a message into a task item.
In the U.S., newcomer Ryver puts no limits on its free services, and instead hopes to make money by selling its own integrated team task manager system as an add-on. In case there was any doubt about whose business Ryver is after, this week, the service introduced a Slack Import feature that slurps up all messages, channels, users, and files from a Slack account and imports them into Ryver.
There are far more Slack rivals than would fit in one article, but a few are worth noting because of what they offer.
A discussion of Slack rivals has to start with the previous leader, HipChat. Launched in January 2010, it has the same basic three-pane design style that Slack later adopted. Individual members and discussion rooms appear on the left, the current conversation appears in the middle, but the right pane just holds random stuff like shared files and links. In November, HipChat will launch a revision (in beta), called HipChat Connect, that allows external apps to run inside that right-hand pane, so people no longer have to jump to another app window (assuming app makers opt to integrate their software). Connect makes any app a group app that a whole team can see; that could come in handy for collaborative programs like New Relic (one of Connect’s first integrations), which monitors IT operations and allows people to assign bug tickets. HipChat already integrates with external apps, as does Slack, but the integrations provide just a glimpse into the app, sometimes only notifications.
Steve Goldsmith, general manager of HipChat at parent company Atlassian, promotes HipChat as a service for everyone, “to cover that whole spectrum of your two-people-in-a-garage-with-a-credit-card, early-stage startup to huge cloud customers,” he says. But HipChat’s current direction has a corporate feel. Goldsmith even names “corporate email” as the market HipChat is targeting. Atlassian sells a version called HipChat Server that can run internally on a company’s own servers—as an alternative to using HipChat’s cloud service—for companies that want tighter control, and have the IT infrastructure to manage that. HipChat Server clients include American Express, HomeAway, and NASA.
Slack does not offer such an “on-premise” version, as it is known, but it provides the security measures that are becoming standard in this space, including 256-bit AES encryption—which HipChat also provides. HipChat says that additional security measures are on the way, but isn’t providing details yet.
Slack is finding favor in startups and among software developers who work in smaller groups and often in less-formal environments—which had been HipChat’s home turf. “It seems like there’s just more of a vibe in the dev community around Slack at this point, and Atlassian is playing catchup,” says Forrester analyst Jeffrey Hammond. “It’s a bit surprising, actually, as I’d expect the reverse.”
HipChat provides individual and conference-call voice communication, other mainstays of the corporate environment. HipChat also features one-on-one HD video calls. (Slack says that it plans to add both voice and video in the future.) In April, Atlassian purchased Blue Jimp, a company that runs the open-source Jitsi project for handling high-quality, multiparty video conferences and screen sharing. “We’ll continue working on integrating that into HipChat,” says Goldsmith.
Spotify is a big-name customer of Slack, with more than 1,000 users. But Spotify’s staff also uses group-messaging app Lua (no relation to the programming language of the same name) in its marketing and sales teams. The apps appeal to different work cultures, says Michael DeFranco, Lua’s founder and CEO. People like software engineers enjoy the chatty aspects of Slack, where several conversations happen at once.
Lua is pared back and focused on work-related conversations. For example, it integrates some business-focused services such as Box, ShareFile, and Salesforce, but not consumer or DIY apps such as Google Calendar and IFTTT, or time killers like the Giphy animated-GIF search engine (all of which Slack integrates). The visual design itself is more streamlined than Slack’s or HipChat’s, with lots of white space. Lua is also more structured for big corporate environments, with the ability to search for users by their department and position.
Mobile is also a focus for Lua, which targets companies with people on the go, such as United Airlines. “They’re not desktop bound, they’re all over the place,” says DeFranco. “For them to have different channels of people speaking [as on Slack] isn’t necessarily going to help them. Calling is really critical to their workflow just as much as messaging.” Hyatt Hotels also uses Lua for group calls in teams, such as its housekeeping and food and beverage staff, in place of handheld radios. Lua supports group calls of up to 40 people by patching them from the app into its conference calling system, and Lua is adding a voice over IP (VOIP) calling option by the end of the year with theoretically unlimited participants.
Another focus for Lua is health care, with clients such as HMO giant Kaiser Permanente and the University of Louisville School of Dentistry. Lua says it has passed an audit that certifies it as HIPAA compliant for handling confidential personal medical records. Despite having some big-name clients, Lua appears to be small compared to competitors. When I asked about the number of customers, the company sent back an email saying only, “Lua has hundreds of clients and thousands of paid users.” Lua contends that as a paid, enterprise-focused product, adoption takes longer than it would for a freemium like Slack or HipChat.
At first, VoIP provider Switch (which in 2016 was rebranded as Dialpad) might not appear to have any connection to Slack and the like. Switch doesn’t even offer group chat (although it will be available as a new feature in November). When it does, Switch will have the benefit of building on a large user base (with data centers on four continents) that has its calling and productivity-app software on desk phones, smartphones, and computers. “I’m sure they’ll add more telephony,” says Switch’s cofounder and CEO Craig Walker about group messaging apps companies, “and we’ll add more messaging. The distance between us will shrink.”
In 2007, Walker sold his previous startup, telephone-management company GrandCentral, to Google; it became the Google Voice online calling service. In January 2015, with backing from Google Ventures, Andreessen Horowitz, and other funders, Walker launched Switch as a cloud replacement for a company’s traditional PBX phone system. Since then, the company has picked up thousands of customers, it says, the biggest being Motorola Solutions, with 12,000 workers.
Instead of having a physical line, employees have a number that may ring to the phone on their desk, their cell phone, or their computer, depending on their preferences. Switch provides one-tap call handoff between all these devices, and voicemails are accessible from any of them. Such features are possible with consumer products like Google Voice and Apple’s Continuity, but Switch integrates those modern features with the archaic phone systems that still dominate the corporate world. For example, it puts company phone directories on smartphones.
Switch goes further by pulling all of Google’s apps, like Gmail, Google Calendar, and Google Docs into its desktop and mobile-device interface. Switch can do the same for Microsoft apps through integration with the Office 365 cloud service. By the end of the year, this home screen will also include UberConference, Walker’s web-based conference call and screen-sharing service. As such, Switch also aims to be the mission control that Slack, HipChat, and other messaging apps also aspire to.
Walker says that group chat is “on the horizon,” and he admits it needs to happen soon. “We’re moving from the phone side over to the messaging side,” says Walker.
No matter how fast the pack of rivals moves, it will be a challenge to overtake Slack’s momentum. But Slack’s meteoric rise, especially its challenge to HipChat, is an indicator of how fast things can change in this segment. “It may be more reflective of being in a fast follower position right now, and subject to change,” says Hammond.