Bhavin Turakhia's Flock faces tougher market after Slack-Atlassian deal

With deep-pocketed Microsoft pushing its Teams software, standalone newbie Flock faces uphill task to gain share against dominant vendor Slack

Harichandan Arakali
Updated: Jul 27, 2018 12:35:23 PM UTC
flock

Wealthy entrepreneur Bhavin Turakhia’s collaboration-on-chat software Flock is a made-in-India rival to established vendor Slack Technologies, which just won a victory against another competitor Atlassian.

In an agreement, Slack is taking over Atlassian’s corporate chat software including HipChat and Stride, which consolidates the former’s market share even before newer competitors such as Flock can make a dent in terms of paying customers.

And, while Slack is widely seen as the most successful vendor of such software, it knows this is no time to slacken the stress on growth, because Microsoft is coming. The seller of Azure cloud software is pitching its own collaboration-over-chat software called Microsoft Teams, and is offering a free version as well, to its 135 million users of its Office 365 productivity suite.

Turakhia had told Forbes India in March that this year, he was ready to take Flock seriously commercial, after over two years of development, and winning many business customers for the free version. Flock offered various features that rivals didn’t have, he said in that interview — group videoconferencing for free, for example.

With Slack consolidating Atlassian’s corporate chat software with itself, most of the latter's customers will likely go over to Slack. And newer competitor Flock will have to expand the market to win customers. Turakhia believes that is exactly what he can do, on the back of Flock’s features, but he is up against Slack’s entrenched presence in this space as well as Microsoft’s deep pockets and captive base of large corporates that already use Office 365.

Flock’s likely best bet will be to go after small businesses, which may be more comfortable with Flock’s value proposition, which will certainly have to include more attractive rates. This is an area where Turakhia will face competition more from Slack and not so much from Microsoft, although in the era of cloud computing — where even individual consumers can afford Office subscriptions on the net — that may not be a given.

In March, Turakhia had said Flock had about 500,000 downloads and about 70,000 active users. The aim is to ramp up the number of active users itself to the half-a-million mark, through 2019. At that point, “we’ll be a serious contender,” Turakhia had said in the interview.

Slack today already has those half-a-million customers accounting for some 8 million users everyday, according to a Bloomberg report. Microsoft, in comparison, claims 200,000 businesses as customers for Teams, the report said. Turakhia points to the number of email users, instead, which is in the hundreds of millions even if one were to only consider work emails. Therefore he expects the market to be wide open.

Certainly Slack hasn’t proved to be an email killer. Yet. And Turakhia says the market for collaboration-on-chat is today where email was 15 years ago. Therefore, he or others may get that chance to shape this nascent market. Slack has both the first-mover’s advantage and that of being the current market leader, which has already kicked off the first round of consolidation.

The thoughts and opinions shared here are of the author.

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