Microsoft Teams: Product Evolution, Strategy & Competition

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Was there any execution challenges or tech debt in doing that?

The second challenge was how to move legacy users on existing bundles to new product SKUs. Some of that was organic as people were buying the same thing with a new name. Office 365 became Microsoft 365, and the E5, E3 or F1 suites got grandfathered in. Microsoft also ensured pricing didn't jump and that customers would receive more value in some of these new bundles. Microsoft also added on premium layers such as E5 which had the best security, Azure and Office. Legacy Office 365 customers were moved into E3, their largest base SKU, and had an opportunity to move up. We never removed anything you had, nor did we raise prices. That is how they managed any customer churn or surprise. I don't know how tech debt was managed because they never created any new products, they simply stitched together things and added individual value into each product by connecting them.

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Tell me about that and also what you were thinking about Slack.

When I joined in 2020, 50 out of 280 million Teams users were from SMB. The challenge we faced was these were accidental users who had bought a business standard or premium SKU from Microsoft, with Teams bundled for free. There was no intentionality around using Teams because these SMBs used Slack and Zoom, whatever came to them easiest in their workflow. We were successful with enterprise because they had mandated their employees could only use Teams for video calls and realized the value of integration with the rest of the suite, but we did not see that in SMB. Microsoft products are not built for SMBs. Teams and Office were built for enterprise use, and the feature set was focused on compliance and governance which are needed by a CSI or CTO to allow any product to be used in their organization. SMB use cases are different. They want to use products with less of a learning curve that should work out the box. They worry less about governance, security and data loss prevention, at least not in the initial days as a startup or small mom-and-pop shop.

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Tell me about that and also what you were thinking about Slack.

Their strategy shifted and they allowed Salesforce, Adobe, WhatsApp and Facebook to write their own apps which would be available in Teams. An SMB could choose to use that app and connect their accounts on Salesforce so that information would be connected with Office 365. That strategy had some success and today there are 1,900 apps, but the SMB still has to create an account in Salesforce, who don't give that much data access to Teams. Teams ended up becoming a notification system. When a customer reaches out you will see that notification in both Salesforce and Teams, but it doesn't allow you to talk to customers or create tickets within Teams. That was a challenge and probably still is.

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