Slack is progressing well in its goal to seemingly become the “only game in town” when it comes to workplace chat. In what could be seen as a merger, a surrender or a strategic retreat, Atlassian has announced it will discontinue Hipchat, and sell the IP to Slack.
The two businesses have fought aggressively for years to dominate the sector, but Slack has become the dominant market leader, especially over the last few years. Based on market share, it seems that Slack reached some kind of tipping point, that Hipchat simply couldn’t compete with, at least in the short term.
The deal is structured as a strategic retreat. Atlassian will take on a small, strategic share in Slack in exchange for all Hipchat intellectual property, and assistance in transitioning existing clients from Hipchat to Slack. With rumours of a Slack IPO continuing to do the rounds, a small stake could well be incredibly lucrative in a relatively short period of time.
The next step for Slack will be to demonstrate to its existing customers that the acquisition of Hipchat intellectual property was important. The acquisition of increasingly transient customers will not be enough to satisfy analysts prior to any IPO, so additional value must be shown. Additional and future technologies not yet launched will be at the top of Slack’s list, along with any key leadership and technical staff they may be able to win in the final negotiations.
While this seems like an automatic victory – and it’s difficult to paint it as anything other than that – pre-IPO fever will ramp up the pressure on existing strategies and previous deals. Any attempt to downplay the importance of this acquisition (as it will undoubtedly be termed) could be detrimental to the overall listing.
Of course, at the core of this is the fact that there is one less competitor in what has become a saturated market, and Slack is now positioned as the undisputed champion.