Slack’s lukewarm growth crushes expectations it would profit from increased working from home, says GlobalData

Following the announcement of Slack’s results for the first quarter of fiscal year 2021;

Laura Petrone, Senior Analyst at GlobalData, a leading data and analytics company, offers her view:

“Despite the rapid adoption of remote working tools during lockdowns, the much expected surge in demand for the Slack platform, which is designed to increase virtual collaboration of teams of workers, failed to materialize.

“Total revenue for the three months to the end of April 2020 was $201.7m, up 50% year-on-year. While this growth figure looks impressive on the surface, the company only picked up 12,000 net new customers in in the quarter, to a total of 122,000. In comparison, the video conferencing platform Zoom added 175,000 licenses for customers in the same quarter.

“The shift to remote working will likely extend well beyond the pandemic and interest from businesses in collaboration tools that help distributed workforces will continue. Slack, whose stated mission is to make people’s working lives simpler, hopes to be a strategic player in the future of work. However, it will face significant pressure to differentiate from similar services in a highly competitive market.

“H1 2020 was a once in a lifetime opportunity for Slack and it has failed to deliver. Its shares have slumped 15%, reflecting the market’s disappointment in its performance. Slack must now articulate a more compelling proposition to companies that will adopt remote working in the long-term, or will become another also-ran in the world of collaboration tools.”

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