Can Slack Stand Out From the Growing Competition?

There's a lot of competition for Slack (WORK) in the workplace collaboration space. Zoom Video Communications (ZM -0.82%) has nabbed a growing part of the remote meeting market, while Microsoft (MSFT -1.27%) is a go-to for collaboration and workplace tools. Where does that leave Slack and its investors?

Asit Sharma: Simone says: "In today's announcements, Slack talks about their challenge to distinguish themselves from their competitors. We'd be interested in your thoughts on this stock. It sounds concerning. Thanks." I'll start off this, guys, just to say that I've had my head in a lot of different pies and none of my fingers -- a lot of different pies and my head in a lot of different pies today. Just managed to clean off my face before I went on air with Tim at three o'clock. I had seen an actually analyst downgrade, not any announcement from the company, so if there's something that I haven't seen, let me know.

But I think that analyst downgrade was talking about increased competition from the usual suspects -- Microsoft, Zoom. Into that I want to say about Slack is that Slack has really limited power to be an all-in-one type of collaboration tool. Whereas Microsoft has Teams, which is this big tool that you can use for video conferencing, you can use it for work project management, etc. Zoom is more now focused on video conferencing collaboration. To me, this is an analyst who is pointing out some of the deficiencies long-term, it might have to compete on a scale with the Microsoft or Zoom.

But if you're buying Slack for what it provides to customers today, which is still a very unique product and a robust one -- the three of us use Slack throughout the day-to-day to prepare for this show -- there is no tool quite like it. It doesn't really change the investment thesis as far as I'm concerned. I don't expect Slack to suddenly raise a lot of money and be this formidable competitor to Microsoft Teams. Now, do I think Microsoft Teams can take some of Slack's future market share? Sure. Is Zoom likely to do so? A little less likely, but is Slack likely to become a video-conferencing tool only to compete with Zoom? Why would they want to do that? It doesn't really change my investing thesis. If I were to own Slack, I'm not a Slack owner. Curious if either of you guys follow this company. What your thoughts are on it, and I'm sorry if the company itself announced something that we didn't see. Go ahead, Danny. I'll go and sit this one out.

Danny Vena: OK. Slack is a company that I have followed, I've been kind of intrigued by. The reason is, like you said, we at The Motley Fool use Slack to communicate with one another. I've found it to be a useful tool. But thus far, because there are so many other options out there that bring different capabilities, I have not made the jump to being an investor. Now they recently came out with a more robust set of tools. They came out with something called Slack Connect, which basically adds more tools that allows users to collaborate, not only with users inside their organization, but also outside the organization, so that they can share information. It might be with suppliers; it might be with large customers. I find that to be intriguing. But thus far, I still haven't made that leap, and I'm watching to see how well adoption of Slack Connect accelerates. If it does really well, I think this could move the needle for the company. But thus far, I just haven't been able to bring myself from buy into the thesis that Slack is going to disrupt email or it's going to disrupt Microsoft Teams. I think it's a useful tool, but it may not be for everybody. What do you think, Asit?

Sharma: Yeah. I'll defer to Daniel. Just gave a brief thought on that, so I should let Daniel weigh in.

Daniel Sparks: Yeah, sure. One of the reasons I sat out on this one, I mean that I don't have too much of an opinion is just because I feel like mine is more negative than your average Fool. But I'll share it just so people can hear it. I just think that Slack, if they were targeting programmers, they would love the UI and everyone will gobble it up. I think that the reality is the type of people making decisions for which collaboration services to use at organizations aren't necessarily looking for the slickest UI and user experience that is slightly better. I live here in Colorado Springs. There's a lot of defense companies, government companies, and I just constantly hear those switched to Teams, and they'll just straight up think it's better. A lot of big companies use that. So it's just my weird anecdotal take. I don't always invest like this, but because of the experience I've seen and the way I've seen people talk about Slack, even though I think it is better, I think they're having a trouble making everyone recognize that because they're not targeting programmers. They're just targeting your everyday knowledge worker. That's just my anecdotal take, if it's useful for anybody.

Sharma: Fair enough. A balanced view from two Fools.