What evidence is there, if any, to show that Office 365 customers will pay for Slack when they have Teams for free?
Investors are worried that existing Office 365 customers will not pay for Slack when Teams is added on for free. The reasoning is logical, but evidence shows that companies that are willing to invest in their business processes are also willing to pay for best-of-breed software.
According to Okta, a leading single sign-on provider, large companies used an average of 163 apps in 2018. 76% of the companies that use Office 365 also use one or more Microsoft alternatives, such as Salesforce, Slack, and Zoom. 28% of Okta’s Office 365 customers are “double-bundling,” subscribing to G Suite as well! This shows that companies are not willing to sacrifice best-of-breed functionality and the ability to integrate well with unbundled alternatives for a lower price. In addition, as of October 10, Slack stated that among its top 50 customers, at least 70% use Office 365.
Companies are willing to pay for best-in-class software because the benefits outweigh the cost.