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Microsoft, Mobile and Why Microsoft should have bought Slack

Mar 11, 2016 | 4 minutes |

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I for one, totally buy Microsoft’s positioning as the productivity and platform company for the mobile-first and cloud first world. I think it’s an excellent business opportunity, and although the prospect of selling to corporate executives in dull suits may not inspire a fanatic fan-following among the masses, it is the right thing to do - the addressable market, especially in cloud computing, and for Microsoft as a one-stop solution for all corporate IT needs, is quite large, and the company is just getting started.   There is one puzzle though - Microsoft’s brand of professional productivity is incompatible with mobile, and professional productivity for mobile, is, as of today, an unsolved problem.   The three dimensions of professional productivity Professional productivity is about three things Creation - Giving people the tools to create, and express their ideas. (Documents, Spreadsheets, Presentations software etc)   Collaboration - Document management and collaboration software to help teams work together and get work done fast.     Communication - Communication software to help companies share knowledge within teams   The two dimensions of mobile communication Mobile phones are not meant for professional productivity. They are communication devices, and the only dimension of professional productivity they can unlock, is communication. Sure they are great for personal productivity - you can buy flight tickets, clothing, book cabs and do pretty much anything on the go, but most of this is personal productivity (which brings no revenues to Microsoft) and not professional productivity. The way forward - it’s all about the interface As the way forward, Microsoft should follow a judicious mix of incremental steps and a few brave attempts at revolutionary change, targeted at the interface that users use to interact with the information.   Incremental steps - This assumes that mobile phones will be the dominant devices. They are difficult to interact with, in the context of document creation and collaboration. Therefore making typing easier, working on speech recognition etc. are things that should be done here. I see the SwiftKey acquisition in this context.   Revolutionary strides - What if mobile phones could be made insignificant. What if we could project our information anytime, anywhere and interact with it, seamlessly, without a physical or a touch screen keyboard?   Why Microsoft should have bought Slack I’ve been using and watching the progress of Slack and I honestly felt the company would have made an excellent acquisition for Microsoft. That’s why I was totally surprised to read that Microsoft internally debated and decided not to buy Slack. I was a bit bemused to read the reasons for not buying Slack - that from a product perspective, its features could easily be integrated into Skype.   Buying Slack ought not to have been about the product perspective at all. Instead, the real rationale for buying Slack comes from the markets/customer perspective. Let’s segment the corporate IT market - which can be done on two ways   Method one -  Segment the market by customers’ willingness to pay Using this method, one can define a couple of segments -   Method two - Segment the market by “customers’ legacy” Using this method, one can define two segments   I believe that legacy is a very strong predictor of affinity to buy Microsoft products, and this method of market segmentation is more useful. So going with this definition, here is Microsoft’s position in the two segments     Here is Slack’s position in the same two markets   In short, Microsoft and Slack have customer bases that are (more or less) mutually exclusive and (more or less) collectively exhaustive. That’s why Slack would have made a good acquisition - it would have given Microsoft a foot in the door with startups. Google Apps for work, on the other hand probably doesn’t need Slack, because it already has a strong presence among startups.