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One of the primary reasons that Slack joined forces with Salesforce<\/a> in 2021 in a $28 billion deal <\/a>was to give the communications company the clout to compete with Microsoft<\/a>. For years, company co-founder Stewart Butterfield railed against Microsoft <\/a>bundling Teams with Office 365, calling it anticompetitive and saying at one point that Microsoft was \u201cunhealthily obsessed with killing Slack.\u201d<\/p>\n The company went so far as to file a complaint<\/a> against Microsoft with the European Union in 2020.<\/p>\n This morning, Microsoft announced it was finally unbundling<\/a> Teams from Office 365 in the future, although current customers could continue to use the bundled license.<\/p>\n Butterfield stepped down<\/a> from Slack at the end of 2022, but he seemed less concerned about Microsoft after he became part of the CRM giant, telling TechCrunch\u2019s Connie Loizos in 2021 that Teams seemed to be more focused on<\/a> meeting software like Zoom than Slack, and he wasn\u2019t aware of the status of the complaint his company filed before becoming part of Salesforce.<\/p>\n Salesforce, for its part, didn\u2019t have any comment on the unbundling announcement, but Microsoft\u2019s bundling strategy seems to have worked quite well, with the company reporting it has over 320 million users worldwide. Compare that with Slack, which has 32 million users or 10% of Microsoft\u2019s total. It\u2019s hard to know what exactly that means given the differences in how the two companies count their users, but it\u2019s clear that Microsoft has opened up a significant lead.<\/p>\n Maybe Butterfield was right, but it\u2019s probably too late to matter. \u201cWhile Microsoft is unbundling Teams simply to avoid an antitrust mess, it\u2019s good for Salesforce\/Slack for sure, but in many ways it may be a Pyrrhic victory,\u201d Alan Pelz-Sharpe, founder and principal analyst at Deep Analysis, told TechCrunch. The market has matured to the point that many larger firms have made their choice, and since swapping out solutions isn\u2019t a trivial matter, unbundling Teams is unlikely to have an appreciable impact on market share.<\/p>\n Microsoft\u2019s announcement seemingly allows them to have their cake and eat it too, keeping their existing customers under the existing Office 365 bundling agreement, while charging future customers for using the product, and presumably giving the company an argument with regulators that they\u2019ve unbundled Teams and are not in violation of any anticompetition rules.<\/p>\n In fact, Holger Mueller, an analyst at Constellation Research, says that this could be the first occurrence where an anticompetitive regulation helps the vendor\u2019s business. \u201cMicrosoft has simply sold Teams to enough companies with its existing Office accounts and now no longer needs the energy and power of the enterprise license agreement,\u201d Mueller said.<\/p>\n What\u2019s more, rather than aiding Slack, he sees this as helping Microsoft to get Teams into more accounts where companies weren\u2019t buying Office 365 licenses. Redmond can now sell standalone Teams licenses into non-Microsoft shops much more easily, all while building goodwill with regulators, and still sticking it to Slack in the stand-alone market battle.<\/p>\n That is probably not the outcome that Butterfield envisioned when he started complaining about Microsoft all those years ago, but the regulatory outcome doesn\u2019t always come out in the way you expect, especially when the market shifts so dramatically in the intervening years \u2014 or Microsoft\u2019s bundling strategy simply worked.<\/p>\n<\/p><\/div>\n