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Microsoft Teams. Credit: Microsoft.
Microsoft Teams. Credit: Microsoft.

Microsoft unveiled a new “chat-based workspace” for Office 365 Wednesday, dubbed “Microsoft Teams,” confirming its plans to challenge Slack and other existing players like Workplace by Facebook in business team communication.

“Just like Outlook brought together email, contacts, calendar, into this one one magical user experience scaffolding that changed how we work, Microsoft Teams will bring together chat, meeting notes, Office, Planner, PowerBI, and a host of other ecosystem-developed extensions and applications to help teams get work done,” said Satya Nadella, Microsoft’s CEO, at an event unveiling the new tool this morning.

nadella
Microsoft CEO Satya Nadella at the Microsoft Teams event this morning, via webcast.

Microsoft Teams is a threaded chat tool that uses channels in much the same way that Slack does. Executives are showing the tool for the first time this morning at the event in New York City, available via webcast.

The company says Microsoft Teams will be available as a customer preview in 180 different countries. It will be included in enterprise and small business versions of the Office 365 subscription service. General availability is scheduled for the first quarter of the 2017 calendar year.

Microsoft Teams looks like a cross between Slack and Facebook, with collaborative tools that allow people to work on documents together within threads, and the ability to build and upload memes and emojis to customize the app to match the vibe of the team. Skype is deeply integrated into teams, allowing a quick transition from chat to voice and video conferences.

Microsoft Teams is also works with third party services like Twitter and GitHub, allowing for notifications and updates within the app. As part of the event, Microsoft announced a developer’s preview of Teams to allow companies to integrate it into their own technology. Microsoft says Teams will be integrated with more than 150 partners when it becomes generally available next year.

In addition to a desktop version, Microsoft Teams will be available on iOS, Android and Windows Phone devices.

“You can really think of Microsoft Teams as a digital transformation of an open office environment,” said Microsoft Office exec Kirk Koenigsbauer at the event.

Following the announcement of Microsoft Teams, the company posted a 13-minute introduction video for using and managing the new service.

Slack seems ready for the challenge from Microsoft. In a full-page “Dear Microsoft” open letter in the New York Times published this morning, prior to Microsoft’s event, Slack congratulated Microsoft on its announcement but cautions that “all this is harder than it looks,” and proceeds to give the 41-year-old technology company some “friendly advice.”

“We realized a few years ago that the value of switching to Slack was so obvious and the advantages so overwhelming that every business would be using Slack, or “something just like it,” within the decade,” according to the letter. “It’s validating to see you’ve come around to the same way of thinking. And even though — being honest here — it’s a little scary, we know it will bring a better future forward faster.”

Chat apps, like Slack, have become essential to many teams, as employees increasingly telecommute or work flex hours. Providing workplace productivity tools is essential to Microsoft’s business, so it’s unsurprising that the Redmond, Wash.-based company wants a piece of the action.

Slack itself has grown at a spectacular rate in the last couple years. Last month, the company announced it has reached 4 million daily active users and 5.8 million weekly active users. Over the summer, Slack said it hit milestones of 1 million paid users and $100 million in annual recurring revenue.

Slack launched publicly in February 2014, and within a year had secured more than 500,000 daily active users. At its public launch, Slack had 16 employees. Today it has 650 people working out of seven offices around the globe. Slack has succeeded because it goes beyond a chat app. The ability to integrate Slack with other programs like Dropbox and Google Apps, and its superior search engine, make it the kind of productivity hub that the company seeks to be. After all, the company’s slogan is “Slack is where work happens.”

That is a lot for Microsoft to live up to.

Microsoft has shifted the way it offers its Office products, moving from traditional packaged software to the Office 365 subscription service. The number of Office 365 consumer subscribers topped 24 million in the company’s latest quarter, and the service boasts more than 85 monthly active commercial users. Office 365 for businesses has become the most popular enterprise cloud service in the five years since its launch, outpacing Google Apps for Business.

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