Microsoft released its latest version of Office on Tuesday, Office 2016. The update includes revisions to the software company’s industry-leading “productivity” programs Word, Excel, PowerPoint, and Outlook. Microsoft (MSFT) says 1.2 billion people worldwide pay for these everyday content-creation tools. More and more of them are subscribing to Office’s online version, shorthanded as O365. As Barb Darrow noted on Fortune.com, Microsoft was more than a decade behind in locating the so-called cloud, that metaphorical place software programs now reside. But it most definitely is there now.
Microsoft also is getting decidedly faster at addressing the hot trends in tech. The central thrust of its new Office offering is a series of collaboration tools, including Groups, an application that lets Office users work with each other in real time on Office documents. It even integrates Skype so teammates can see each other as they work.
There was a time when Microsoft would ignore the trend of the moment and most certainly the leaders of the trend. No longer. The company knows who the collaboration leader is, a Silicon Valley company called Slack. “We see this as a kind of Slack killer for organizations that use Outlook,” says Chris Capossela, Microsoft’s chief marketing officer, in an interview coinciding with the launch of Office 2016. “Slack is small, but it’s big with startups,” Capossela said. “It’s a darling of Silicon Valley,” he adds, noting that major corporations with old and young employees, all using Microsoft’s Outlook email program, need a collaboration program that makes everyone comfortable.
Credit Microsoft for not taking this fight lying down. I’ve long maintained that Microsoft, not LinkedIn (LNKD), should have had the most useful contact-management applications, and I’ve been befuddled to watch Microsoft consistently refuse to take the bait LinkedIn dangled in front of it.
Scrappy Slack isn’t shying from a fight either. Reached by email, Stewart Butterfield, Slack’s founder and CEO, said: “We have 1.25 million daily users, 370,000 of which are paid. We have teams on many of the Fortune 500 companies, a near monopoly among news media and tech, do very well in creative industries, and we also have customers in government, including the State Department, General Services Administration, and NASA. We grew users by a factor of 10 over the last year and slightly faster in revenue. For the year ahead we expect to double both twice.”
Butterfield’s thoughts on Microsoft? “They have a four decade head start, but we’ll get there.”
Reflective of that four-decade legacy, Office remains a behemoth for Microsoft. It is its largest business at $24 billion in sales. Capossela says roughly 70% of Office customers are corporate. Consumers are important to the company, though. “We want the future CEOs of Facebook to be using Office.” Microsoft also has been abnormally active creative apps for Apple’s iOS platform. At 85 by its most recent count, Microsoft believes it’s the largest single iOS app developer.
Speedy, ubiquitous, clever, and feisty: Could this really be the Microsoft we knew and never totally loved before?
Microsoft says it is targeting Slack, but in this video Slack CEO Stewart Butterfield explains why he’s not out to kill email: