Microsoft Bursts into Atlassian’s Market: Raymond James Examines – Barron’s (blog)

Raymond James’s Michael Turits this afternoon weighed in on the entrance by Microsoft (MSFT) into the so-called collaboration software market, where Atlassian (TEAM) is a well-known name inside  companies, and also private outfits such as Slack, with something called “Microsoft Teams,” announced yesterday.

The product is offered to those subscribing to Microsoft’s online hosted version of its Office productivity suite, Office 365.

Turits, who has a Strong Buy rating on Microsoft shares, walks through the bevy of capabilities Microsoft brings to the market:

Yesterday, Microsoft announced the general availability of Microsoft Teams, its chat-based workspace product within Office 365. We see Teams as increasing competition in the broad collaboration space that includes private vendors like Slack as well as public vendors in our coverage like Atlassian. Teams is now included with Office 365 (Business Essentials and Premium; E1, E3, E5). Teams has been under preview since November 2016 and now has more than +50K organizations using it, growing +30% MoM. As a chat platform, Teams features consistent, threaded conversations for group chats and private discussions, with the ability to track and follow important conversations. Office productivity tools, such as Outlook, Power BI, and OneNote, are natively built in as tabs, providing more of a centralized location to access Office’s tools. Teams features full Bot Framework support (bots such as Hipmunk, Polly, and MailChimp can easily be deployed). Plus, as part of Office, Microsoft’s machine learning based mapping and API gateway Graph sits in the background. For Teams, Graph makes smart suggestions for team formation based on prior e-mail threads and communications within Outlook. Interestingly, at one point in the demo, Microsoft displayed a code snippet being pasted into a chat and being discussed by the group. While not a focus of the demo, this software development use-case would edge Microsoft’s Teams platform closer to Atlassian’s Confluence and HipChat collaboration offerings that emerged out of the developer vertical. At a partnering level, Microsoft mentioned Teams’ integration with Trello earlier in the webcast, which Atlassian acquired back in January. While Atlassian’s core user base is in the developer and IT community, they have also gotten, and continue to target, broader adoption in the enterprise collaboration space outside of IT, a market that could get more competitive with Teams in the picture as well.

Shares of Microsoft today closed up 34 cents, or half a percent, at $64.75. Shares of Atlassian closed up 11 cents, or 0.4%, at $29.03.


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