Slack vs Microsoft Teams: Market Battle and EU Antitrust Ruling

Name: When Being Better Isn’t Enough...
Uploaded: 2026-04-20T20:00:00+00:00
Duration: 17 min 28 s
Channel: Logically Answered
Description: Summary and key takeaways on Slack vs Microsoft Teams: Market Battle and EU Antitrust Ruling, covering The Rise of Slack Slack began as an internal

Logically Answered

Apr 20, 2026

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17 min video

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YouTube video ID: vxMUFt5mp4Q

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Slack began as an internal communication tool for the game studio Tiny Speck. The product solved the “nightmare” of email‑based collaboration for groups, allowing teams to exchange messages instantly. Growth relied on word‑of‑mouth; no outbound sales team existed until 2016. By targeting end‑users and mid‑level managers who could expense the software, Slack avoided the lengthy approval cycles of top‑level executives. Within eight months the company reached a $1.1 billion valuation, and daily active users rose from 15,000 in February 2014 to ten million by January 2019. The platform’s impact was captured in the claim that “Slack practically invented messaging for businesses.”

Microsoft’s Countermove

In 2016 Microsoft considered an $8 billion acquisition of Slack but declined after Bill Gates advised against it. Instead, Microsoft first tried to turn Skype into a business platform, then abandoned that effort and built Teams from scratch. Teams gained a competitive edge through native voice, video, and PSTN integration, and by meeting strict security compliance standards such as HIPAA and PCI‑DSS. The decisive advantage came from bundling Teams with Office 365, forcing installation for millions of users. As one commentator put it, “Microsoft didn’t ‘win people over’ from Slack. They were trying to kill Slack.”

The Conflict

Slack responded by filing an antitrust complaint with the European Commission, comparing Microsoft’s bundling tactics to the historic browser wars. The complaint highlighted the “exodus” of users migrating to Teams after forced installations. In 2020 Salesforce acquired Slack for over $27 billion, aiming to embed it in the Customer 360 platform. The acquisition triggered the departure of key executives, including co‑founder Stewart Butterfield and former Salesforce Co‑CEO Bret Taylor. A former insider observed, “You can see the horrible things that Microsoft did to Slack before we bought it.”

Post‑Acquisition and Regulatory Outcomes

The EU investigation concluded that Microsoft’s pre‑installation of Teams breached competition rules. The European Commission ordered Microsoft to unbundle Teams from Office 365 for seven years, but imposed no financial fine despite the authority’s power to levy penalties up to 10 % of global revenue. Today Microsoft Teams holds a 37 % market share, while Slack’s share sits at 13 %. Slack reported $1.7 billion in revenue for 2023, reflecting a 17 % year‑over‑year growth. The landscape remains contested, with Microsoft having “won by changing the rules, then quietly abiding by them when they got caught,” while Slack continues to serve a sizable portion of the enterprise messaging market.

Takeaways

Slack grew from a Tiny Speck internal tool into a $1.1 billion‑valued platform by relying on word‑of‑mouth adoption and targeting mid‑level managers.
Microsoft rejected an $8 billion offer for Slack, then built Teams, leveraging security compliance and bundling it with Office 365 to force widespread installation.
Slack’s antitrust complaint likened Microsoft’s bundling to the historic browser wars, prompting an EU investigation that required Teams to be unbundled for seven years.
Salesforce’s $27 billion acquisition of Slack led to the departure of key executives, including Stewart Butterfield and Bret Taylor, while Slack’s 2023 revenue reached $1.7 billion.
Despite Microsoft’s dominance with a 37 % market share, Slack retains about 13 % of the enterprise messaging market, reflecting a continued competitive landscape.

Frequently Asked Questions

Why did Microsoft bundle Teams with Office 365?

Microsoft bundled Teams with Office 365 to exploit its massive installed base, making Teams the default collaboration tool for millions of users and gaining a strategic advantage over Slack through mandatory exposure and integration with existing enterprise workflows.

What was the EU antitrust ruling on Microsoft Teams?

The European Commission concluded that Microsoft’s practice of pre‑installing Teams violated competition rules, ordering the company to unbundle Teams from Office 365 for seven years, though it imposed no monetary fine despite the possibility of penalties up to 10 % of global revenue.

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Full Transcript YouTube

Slack was the king.
Explosive growth,  
over a billion in funding, a billion 
dollar valuation in 8 months.
But most of all, users loved it.
Slack practically invented  
messaging for businesses.
But now, it’s being replaced. 
Things were going too well, so 
along came Microsoft to the rescue. 
Now, Slack is fighting for its life.
How did Slack lose, while in most ways,  
it was better than Microsoft Teams?
And… will Slack survive?
One of the strangest parts of this story 
is that Slack was sort of an accident. 
It was an internal tool at 
a game studio: Tiny Speck. 
When their game failed in 2012, co-founder 
Stewart Butterfield had an idea. 
The messaging tool was really good.
It was clear to Butterfield that Slack,  
as it was now called, was solving a problem, 
and oh boy, was this massive problem.
I want you to imagine a world 15 years ago.
There's no Teams, Slack, Discord, or any group  
messaging apps. All businesses were just using 
email. And the only alternative was meetings. 
For one-on-one conversations, yeah, not 
bad, but as soon as you need two, three,  
or more people, it was a nightmare.
Forwarding, CCing, BCCing people,  
just scrolling up the conversation… Collaborating 
was… and still is a nightmare inside email. 
There was a huge opportunity, which brings us 
back to Tiny Speck, now Slack Technologies,  
who made their new platform public in August 2013.
There was a certain vibe to Slack.
It felt like the new, cool, upstart tech product. 
Startups, small and medium businesses, 
loved Slack. Especially in Silicon Valley. 
A slick UX, custom emojis, great and robust file 
sharing, searchable chats, quick communication,  
threaded conversations, channels — it had it all.
Slack began exploding, but not in the way  
you might expect.
This software was  
really good. Everyone in tech was saying 
the same thing: "You have to use Slack". 
Slack didn't have an outbound 
sales team until 2016. 
It was growing by word of mouth.
"We begged and cajoled our friends at other  
companies to try it out and give us feedback."
On day one, they had 8,000 users,  
then 15,000 two weeks later.
Slack was growing fast. 
They reached a $1.1 billion valuation in 8 months.
It was the "fastest-growing business app  
ever" — at least, according to Slack.
And before they even had a CMO. 
Yet, even when they did have sales staff, 
their technique was, honestly, pretty great. 
They pitched Slack not to a top executive like 
a CTO or CIO, but to a regular team manager. 
"For small organizations, team and company 
may be one and the same. But if you look at  
an organization of 15,000 people, you end up 
with a situation like Adobe, with nine paid  
Slack teams. Mid-level managers could say, 'This 
thing sounds cool, let's try it out for our team.'  
If they liked it, it was affordable enough to 
just expense it." (Stewart Butterfield, 2015). 
That's great. Building for the end 
user first. Yet, unfortunately,  
this would come back to bite Slack down the line.
Nonetheless, for now, Slack was unstoppable. 
In February 2014, it had 15,000 daily 
users. The same time the following year,  
that was over 500,000, with 135,000 paid users.
They crossed 2 million by the end of the year,  
then 4 million in October 
2016, less than a year later. 
By January 2019, Slack had passed 10 million 
daily users, with $400 million in revenue. 
The same goes for funding too.
$42 million in 2014, then $110  
million later that year.
$172 million in 2015,  
$208 million in 2016, $412 million in 
2017, then another $427 million in 2018! 
They were gearing up for an IPO too.
Everything was going great…  
at least, on the outside.
Behind the scenes, a huge battle was taking place. 
And as many stories go, it got 
worse when Microsoft stepped in.
One of the biggest problems facing those 
in software is actually something called  
"legacy tech debt". You know, those walls of 
code built years ago by a senior developer,  
who's gone now. Documentation is hazy, and 
there are comments that say "don't touch this,  
it breaks everything, we don't know 
why". Now, no one knows how it works.
People have tried to modernize it, 
with ChatGPT or CoPilot, and… nothing's  
worked. So you just… keep using the build 
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Let's go back to 2016. Slack was 
exploding, and Microsoft wanted in. 
In March 2016, Microsoft considered 
buying Slack for $8 billion. 
But they didn’t. Why?
Bill Gates. 
He believed Microsoft didn't need Slack. 
Rather, he argued Microsoft should just 
build a competitor… on top of… Skype. 
A twist, I know. Skype? Really?
But here's some important context.
Microsoft had just spent $8.5 billion 
on Skype, and it wasn't going too well. 
This app wasn't really making any money.
They tried to make the platform a business  
platform, as well as a personal one.
It wasn't working. 
But they had the template right in front of them.
Why not make Skype the new Slack? 
Skype Teams, as it was called, already 
had different channels, aka chat rooms. 
It was just lacking a few special bits 
from Slack, like threaded conversations. 
It would soon join the Office 365 suite as part 
of the monthly subscription for businesses. 
But things didn't go as planned.
Skype was… well… not very good. 
It was an old app already, its brand was messy, 
and users were having all kinds of problems. 
So Microsoft went back to the drawing 
board. Cut Skype, build from the ground up: 
Teams.
Skype Teams, just without Skype. 
And this app was a huge blow to Slack.
Because Teams was actually a very  
well-built product.
Slack was better in a  
lot of ways. It had way more app integrations,
had a better developer experience, a nicer UX,  
but Teams was better in ways that mattered more.
It was almost as good as Slack,  
and it also did something better.
Small to medium companies loved it,  
especially in Silicon Valley, but the big players 
— aka the ones with deep pockets — not so much. 
Giants like Uber, even after using 
Slack, eventually ditched it. 
Teams was in the perfect spot.
It had voice, but also  
video — aka video conferencing — plus 
dial-in calling, and PSTN integration. 
This was definitely a weak spot of Slack's. Many 
companies using Slack would also use Google Meet  
or other software.
But there was more. 
Uber ditched Slack, not due to features, 
but for another reason: security. 
Slack had done an SOC 2 audit, but didn't 
have compliance for PCI-DSS or HIPAA. 
Microsoft did, and more. (Show on screen in a list 
side by side: Microsoft: SOC I and 2, ISO 27001,  
HIPAA, EU Model Clauses. Slack: SOC 2, ISO 27001).
Teams was more secure, and for big corporations,  
this was very important. For some, like a 
hospital or bank, this is just a hard requirement. 
But Microsoft wasn't just coming for 
enterprise. It was coming for everything. 
Slack was a better sell to end 
users and middle management,  
but Teams was a better sell to 
heads of IT and heads of companies.
Teams didn't need to be a better app. Because 
Microsoft didn't build it for the end user. 
The biggest difference, by far, was that 
Teams was included in 365. That's it. 
Teams was force-installed for 
every Office 365 subscriber. 
Millions of enterprise users, overnight.
And very quickly, managers everywhere did  
the math: We already have Teams in 
365… why are we paying for Slack? 
But this isn't the end of the story.
Slack wasn't about to roll over on this.
Like Slack, we’re still trying to 
grow. So if you could subscribe,  
it’d mean a lot! We’re almost at 1 
million, and we need your help. Thanks.
On November 2nd, 2016, readers saw an 
entire, full-page ad titled "Dear Microsoft."
It was a long, extensive list of 
"advice" to Microsoft on how to make a  
good product — aka, why Slack was so good.
"One final point: Slack is here to stay.  
We are where work happens for millions of people 
around the world. We're glad you're going to be  
helping us define this new product category. We 
admire many of your achievements and know you'll  
be a worthy competitor."
Slack also published  
the same letter on their website.
Slack was ready for a fight. But they  
were certainly a bit rattled.
And for good reason. 
Teams added 31 million daily users in 
a single month in 2020. For context,  
Slack had 12 million total.
There was a great exodus. 
Thousands of companies were leaving the colorful 
UI for that bleak, corporate, purple knock-off. 
Unfortunately, their opponent 
had broken the rules. 
Instead of competing for customers by having the 
best product — aka, the free market — Microsoft  
just bundled Teams with something hundreds 
of millions were already paying for. 
Microsoft didn't "win people over" from 
Slack. They were trying to kill Slack. 
So, Slack went to war.
[Slack Complaint, 2020]: 
"Microsoft is reverting to past behavior. They 
created a weak, copycat product and tied it to  
their dominant Office product, force installing it 
and blocking its removal — a carbon copy of their  
illegal behavior during the 'browser wars.'"
"Slack simply wants fair competition and a  
level playing field. Healthy competition 
drives innovation and creates the best  
products and the most choice for customers. 
We're asking the EU to be a neutral referee,  
examine the facts, and enforce the law."
Butterfield also said "Microsoft is perhaps  
unhealthily preoccupied with killing us, 
and Teams is the vehicle to do that." 
But the EU, being a government body, 
was very slow. It would be years  
before they got to Slack's complaint.
And Slack was running out of time. 
Every day, more businesses left Slack 
for Teams, and Slack's revenue fell. 
Then came an unexpected rescue.
Butterfield had met with Bret Taylor, Co-CEO  
of Salesforce, about potentially buying Quip 
from them. Though the discussion soon flipped. 
In late 2020, Salesforce would buy Slack for over 
$27 billion — their largest acquisition ever. 
Slack would be integrated into Customer 
360 — aka Salesforce's own 365 suite. 
This could save Slack, but 
then came an unexpected hurdle. 
Exactly two years later, Bret Taylor resigned.
Just days later, Butterfield also resigned. 
Slack's own chief product officer 
and SVP of marketing followed. 
Why?
First, Butterfield. 
He had a number of obligations 
after the acquisition. 
And it seems like those 
lasted for exactly two years. 
So, when his contractual obligations from 
the acquisition were up, he stepped away. 
And it's hard to blame him:
"Butterfield's exit also has to  
do with Salesforce asserting itself more with 
Slack, and as that happens, other longtime  
executives are taking the opportunity to leave."
[Jason Wong, Analyst]: "It's clear that Salesforce  
is taking Slack in a direction 
that is more aligned to extending  
and enabling their Customer 360 Platform."
Bret Taylor, though, was a bit more worrying. 
He was the architect of the acquisition. 
His vision was for Salesforce to become  
a "digital HQ", with Slack at the center.
But Taylor leaving at the same time signaled  
that the bet might not be working.
Microsoft 365 was just too strong. 
Salesforce stock fell 8.3% the 
day after Taylor's resignation,  
then another 7.4% the day Butterfield resigned.
The whole year, it had lost 47% of its value. 
And, ironically, replacing Taylor was Lidiane 
Jones, who had spent twelve years at Microsoft. 
Speaking of Microsoft, there was 
some good news for Slack at last. 
In 2023, the EU had finally gotten 
around to their investigation,  
and it wasn't in Microsoft's favor.
But something unexpected happened. 
Microsoft knew they were in the wrong. So they 
quietly separated Teams from 365 in Europe. 
Then globally in 2024.
Then in 2025,  
the European Commission made their verdict.
Teams had to stay unbundled for 7 years. 
But it could be offered at 
a discount to 365 customers. 
The penalties were up to 10% of 
Microsoft's worldwide revenue. 
But, there was no fine.
Microsoft just had to separate it,  
years after the damage was done.
[Marc Benioff, Salesforce CEO]: "You  
can see the horrible things that Microsoft 
did to Slack before we bought it. That was  
pretty bad and they were running their 
playbook and did a lot of dark stuff."
Despite all this, Slack isn't dying. 
But its situation still isn't great. 
Revenue in 2023 was $1.7 billion, up 17%.
They currently have 47 million daily active users. 
Slack still has a strong hold on niche 
markets, like small businesses and startups,  
and even some giants in the Fortune 100.
But the clear winner is Microsoft Teams. 
They have 37% market share, 
while Slack has just 13%. 
Though, I don’t know many 
people who actually love Teams. 
It makes me a bit sad, what happened.
There are a lot of what ifs but in  
the end, Microsoft won by changing the rules.
Then quietly abiding by them when they got caught. 
While Teams is killing Slack, Microsoft is also 
killing one of their own beloved apps in 365. 
Microsoft, weirdly, has two different mailing 
apps. Now it's trying to combine them into one,  
much worse app: New Outlook.
And users aren't happy. 
Click here to learn the rest of the story.

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Sony Thought They Got Away With It...

Logically Answered

May 12, 2026

Microsoft’s Countermove

The Conflict

Post‑Acquisition and Regulatory Outcomes

Takeaways

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