Microsoft aims to dominate technology at work, starting with those video calls

Microsoft aims to dominate technology at work, starting with those video calls
When New York City’s education department ordered teachers to stop using Zoom videoconferencing for classes in April, because of security concerns, Microsoft Corp. seized the moment.

A team of 50 Microsoft staffers worked around the clock with administrators and teachers across New York’s school district, the nation’s largest, to convert them to Microsoft Teams, the company’s rival conferencing and collaboration software. Microsoft also gave the district expedited access to features that made Zoom so instantly popular, such as the ability to show more people on the screen at once and a raise-your-hand button.

Microsoft counted more than 110,000 Teams users inside the district a month later, when the department allowed Zoom access again.

The pandemic has supercharged a battle over the future of business computing, pitting Microsoft against a growing list of rivals. More is at stake than chatting over video calls. Chief executive Satya Nadella has hailed Teams as critical to Microsoft’s future, in essence, a new operating system that would serve as a hub for the company’s more famous products such as Word, Excel and PowerPoint.

Years of market-share jockeying have been compressed into months with so many white-collar workers operating from home. Tens of millions of additional people are now using Teams and other products from companies including Zoom Video Communications Inc., Slack Technologies Inc. and Alphabet Inc.’s Google.

Some rivals say Microsoft has deployed sharp-elbowed business tactics reminiscent of an earlier era, when its Windows operating system dominated the software market—putting pressure on startups by copying product features, seeding doubt about competitors to potential customers and bundling its software to gain an edge.

“They want to kill us, as opposed to have a great product and make customers happy,” Slack CEO Stewart Butterfield said.

Microsoft said it was focused on working with rather than inhibiting competitors, including thousands of partners who integrate with Microsoft services.

That said, since the pandemic, “the world has changed,” said Jared Spataro, corporate vice president for Microsoft 365, which encompasses Teams. “We intend to compete and win.”

Global weekly downloads of business apps like Teams on smartphones surged from around 33.7 million in early October to 80 million in mid-April, according to data tracker App Annie. Videoconferencing app downloads have reached 50 million a week, from 5 million, during roughly the same period.

In April, Microsoft reported that Teams had grown to 75 million daily users, more than double its early March figure. On one day, it logged 4.1 billion meeting minutes.

“As Covid-19 impacts every aspect of our work and life, we’ve seen two years’ worth of digital transformation in two months,” Mr. Nadella said in April, when Microsoft reported stronger than expected earnings.

Among Microsoft’s rivals, Zoom said in April it had 300 million daily participants across its paid and free services—a broader measure than Microsoft’s unique 75 million daily users—up from 10 million at the end of last year. In March, halfway through its quarter, Slack said it saw a 40% increase in customer growth compared with the prior two quarters.
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