Slack proclaims Amazon Web Services its 'preferred cloud provider' and ups its commitment to $425 million as the companies partner on joint tools and start to roll out Slack to Amazon employees (AMZN, WORK)
- AWS is partnering to use Amazon infrastructure for Slack tools.
- As part of the deal, Slack is increasing its commitment to AWS to $425 million from $250 million.
- Amazon will also start rolling out Slack to its employees, and Slack for the first time publicly proclaimed AWS as its "preferred cloud provider."
- Do you work at Microsoft? Contact this reporter via encrypted messaging app Signal (+1-425-344-8242) or email (astewart@businessinsider.com).
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Securities filings reveal Slack upped its committment to AWS to $425 million from $250 million. The company's annual committment to AWS increased to $75 million from $50 million and will increase by $5 million every year until 2025.
"We're both the innovators and leaders of our respective areas coming together," Slack's business development chief Brad Armstrong told Business Insider, adding that the partnership "illustrates the fallacy of the argument that only an integrated solution can come from a monolithic vendor that's providing all things. We are the best at what we do."
AWS and Slack said the partnership is not targeted at competing with any company in particular, but Armstrong's comments appear to refer to what's often said to be an advantage of Microsoft's chat and collaboration app Teams — which integrates tightly with Office 365, Microsoft's suite of ubiquitous business apps.
Microsoft recently said Teams has reached 75 million daily active users, up from 44 million in mid-March.
The partnership also comes after Zoom teamed up with Oracle to support a surge in users during the pandemic, although AWS CEO Andy Jassy during a recent virtual speech made sure to clarify "the vast majority of Zoom's cloud infrastructure runs on AWS and it will for foreseeable future."
Slack and AWS have worked together for years, but Armstrong said this is the first time Slack has made a public statement to "reveal we are designating AWS as our cloud provider."
Slack has relied on its own technology to power voice and video calls from within its app, but by its own admission falls short of the standards in teleconferencing set by apps like Microsoft Teams or Zoom.
Amazon has its own, lesser-known online meeting, videoconferencing, and chat app called Chime. As part of the deal, Slack will use the software development kit from Chime to power its audio, video, and screensharing capabilities in Slack calls.
Analysts have also suggested that Amazon could turn to acquisitions to bolster its efforts in the collaboration space — and have named Slack as one of its most likely targets, should it go that route.
While Chime doesn't appear to be as widely used as Slack or Teams, the partnership shows interest in Chime as a developer service. Market share information isn't available for Chime, but as one analyst recently told Business Insider: "I cannot recall attending a Chime meeting that wasn't related to or hosted by Amazon."
Eron Kelly, general manager of AWS compute infrastructure and applications, told Business Insider that Chime will still be available to end users, but that Amazon has in the past six months seen a lot of interest in Chime's software development kit.
"Customers are really interested in taking advantage of the scale, reach, reliability that the AWS platform can provide, not only for compute, storage, and database services, but also for video and voice services," Kelly said. "We are seeing people want to have collaborative experiences like voice and video in the context of the work they are doing."
Amazon will start rolling out Slack to its employees. Kelly said, "We are now making it available as part of this partnership and we will be able to roll it out across the company but it's early stages."
Are you a Microsoft employee? Contact this reporter via email at astewart@businessinsider.com, message her on Twitter @ashannstew, or send her a secure message through Signal at 425-344-8242.
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