Microsoft, Slack, Zoom, and the SaaS Opportunity

Great article over at the Stratechery site with a focus on MSFT but in context of SaaS and with insights on Slack and Zoom. After reading it my interest in Slack as an investment has increased due to its high optionality (and cult like following) and growing ecosystem (ala Twilio), while my interest in Zoom stays neutral.

On Slack:
This gets at why I believe Slack is the poster-child for the impact of the Internet on the enterprise software market: Zoom is in some respects a more impressive business, but its use-case was a pre-existing one. Slack, on the other hand, introduced an entirely new way to work, and based on its S-1, did so in a way that will produce a very profitable company over time (Slack is losing money, but at a far lower rate than it is growing revenue; this is a company that has leverage on its costs and will be very profitable in the future).

On Zoom:
The challenge for incumbents, including Microsoft and also other competitors like Citrix, Cisco, etc., is that years of building their business on leveraging their existing relationships with enterprises left them vulnerable to a company like Zoom singularly focused on delivering a superior product, at least once a SaaS architecture made distribution so much easier. Make no mistake, enterprise software still requires a sales force, but it is far easier to start with customers that have already discovered and tried the product on their own than it is to sell something without any sort of pre-existing relationship.…