When you think of productivity, you might think of Facebook (NASDAQ:FB) ... and how much of a productivity drain it can be. But Facebook is working to change that notion with its enterprise-facing software, Facebook at Work, which looks similar to the all-too-familiar standard Facebook, but is aimed at intra-office communications similar to Slack and Microsoft's (NASDAQ:MSFT) Yammer.
Recently, Facebook released a Messenger equivalent for Facebook at Work called Work Chat. The new app puts Facebook at Work in closer competition with the more established chat-focused apps listed above. And Facebook has already laid some groundwork with its Messenger Platform to become a real competitor in the enterprise social software market that's expected to grow to more than $8 billion by 2019.
Not just a communication tool
The key to both Yammer and Slack is that they don't just operate as casual chat apps to keep coworkers in touch on projects or allow an employ to easily communicate with individual coworkers without starting an email thread. They allow businesses to integrate their own apps into their software.
Yammer displays key partnerships with Zendesk, Hootsuite, and smarsh, to integrate their software with Yammer. Slack has integrations with DropBox and Google Calendar, and it can even call you and your coworkers a Lyft to take you to lunch. These extras make the app much more effective than just another chat interface. So, in order for Facebook to compete, it must be more than a Messenger analog with a focus on coworkers instead of friends.
That's why the Messenger Platform, which Facebook launched in March, will be key to Facebook's success with Work Chat and Facebook at Work. Messenger Platform allows developers to integrate their apps with Facebook's Messenger. So far, it's mostly confined to sharing pictures and videos.
But businesses may develop more useful tools (for themselves or others) if there's a growing audience of enterprise users on Work Chat. With that foundation laid already, Facebook must use it as a selling tool in order to compete with established players like Yammer and Slack.
Yammer already has over 10 million users. Office 365, of which Yammer is now a part, had 18.2 million subscribers as of Microsoft's most recent quarter (but not all of them use Yammer). Slack's most recent update put its total active users at 1.7 million. Facebook is playing from behind, but it's well on its way to its first million users. Continued wins will require more than just a familiar user interface.
A path to monetization
Most important to investors is that Facebook could use Work Chat as a path to monetization. It can follow the same path as Slack.
Slack offers a free version of its app to businesses, but in order to gain access to a searchable archive of conversations and unlimited service integrations, it requires a subscription. Slack's most recent update was that 300,000 of its users are on paid subscriptions (but that was when it only had 1.1 million users). In February, the company said it was adding $1 million in new contracts every 11 days, and it's likely growing even faster now.
With the early positive response to the Facebook at Work beta, Facebook can likely outdo Slack's early performance if it takes a similar route. Facebook could accelerate the adoption of enterprise social software and the death of intra-office emails. As a result, Facebook at Work could grow into a billion-dollar business in the not-too-distant future thanks to the growing millennial workforce already familiar with the Facebook and Messenger user interface and the existing development platform with Messenger that could easily be adopted for enterprise use.