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June 5, 2020

Slack Migrates Its Native Voice and Video to Amazon’s Chime

Company emphasises push on "multi-channels"

By claudia glover

Slack is migrating all of its native voice and video calling capabilities on to Amazon’s Chime — a move announced as Amazon also become the enterprise collaboration software tool’s largest customer in Q1.

The move comes amid a huge surge in the use of enterprise conference and calling tools: Zoom, for example, reported a 169 percent rise in revenues to $328 million in Q1 earnings revealed this week.

(Slack failed to grow at quite the pace, with total revenues in the first quarter of $202 million, up 50 percent year over year).

Touting some major new enterprise customer wins, including Verizon, Slack’s CEO was keen to put the focus on so-called “shared channels”.

“I think Slack really comes into its own when it’s also a lightweight fabric for systems integration”, CEO Stewart Butterfield told investors.

On an earnings call, he was keen to emphasise that Slack’s top priority for this fiscal year is “shared channels”; the tool’s bid to get customers communicating across organisational boundaries using Slack. (“For example, you might recommend that your sales team request a shared channel with every new customer once a non-disclosure agreement is in place”, Slack suggests).

The company said it spent 30 percent of revenue ($61 million) on R&D in the quarter, with a focus on “user experience, scalability, our platform and new features”.

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AWS Slack Deal

In a bid for deep integration with the software company, Butterfield explained that he wants to use the partnership with AWS to offer users a richer experience: “We really want to allow people to create the kind of very simple applications that you find inside of companies if you go back in the time machine a little bit, and working with AWS on that, is something that’s a little bit more forward looking, besides the integrations we’re doing now”.

Slack landed a record 90,000 net new free and paid account applications for companies in the first quarter of the 2021 fiscal year, bringing the total to more than 750,000. The company reported non-GAAP operating loss of $22 million to $18 million, and a non-GAAP net loss per share of $0.04 to $0.03.

A Virtual Office in the New Normal

Looking to the future Slack is hopeful that the new application of shared channels will become a fixture in the post-pandemic new normal market.

Establishing a private network for a company will create the atmosphere of a virtual office, claimed Butterfield in the earnings call: “Slack acts more like a digital office, a persistent place for users to connect and find information.”

Multi SaaS Company Shared Channel

Butterfield has been using the multi-channel approach himself for advice as to how to navigate the pandemic. He and 15 other CEOs of SaaS companies have the same shared channel that enables them to pool resources, he said.

In fact, according to CFO Allen Shim, the platform helped Slack to carry out a convertible offering of the raised sum of $750 million in the first quarter:

“We were able to do a convertible offering in 10 days end-to-end because we have had this multi org-shared channels feature.

“And so being able to fluidly flexibly raise that money across bankers and lawyers and all these different stakeholders while everyone’s working remotely, it’s only possible because it’s on Slack”.

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