Blue Origin and Amazon founder Jeff Bezos.
Mandel Ngan | AFP | Getty Images
Slack and Amazon are deepening their partnership. Under a new deal announced Thursday, all Amazon employees will have access to Slack’s workplace collaboration tools. In addition, Slack will deepen its reliance on AWS, revamping its video-calling feature to take advantage of an AWS service called Chime.
The alliance helps both companies battle Microsoft, whose Teams communications service has grown in popularity alongside Slack in recent months as companies and schools have reached for software that can enable people to meet remotely during the coronavirus pandemic.
Slack’s growth has remained steady during the coronavirus pandemic, but has not accelerated, despite many companies moving to keep employees home, the company revealed in its fiscal first quarter earnings report earlier on Thursday. The company’s shares dropped more than 15% after hours.
Amazon and Slack have a long history. Slack has run its service on Amazon Web Services infrastructure since launching in 2014, and it has continued to lean on AWS to accommodate additional demand during the pandemic.
The new deal was negotiated separately from Slack’s cloud contract, the companies said, declining to disclose exact terms. A filing on Thursday disclosed that Slack will now pay AWS at least $425 million over a five-year period that ends Apr. 2025, up from a previous commitment of at least $250 million ending in July 2023.
Some teams within Amazon had already used Slack, but this deal will bring it to all employees. Amazon is the second-largest private-sector employer in the U.S., with over 840,000 full-time and part-time employees in the first quarter.
Amazon employees have been able to use an in-house video-calling tool called Chime, which the company also offers to its customers.
But Matt Garman, AWS’ vice president for sales and marketing, admitted in an interview that Amazon has not invested in Chime’s user interface to the extent that Slack has.
“We have a client UI. It’s nice, but it’s not Slack. They’re way better. It’s a much richer experience. You can do a lot more.”
Garman noted, “Increasingly I see customers wanting to use best-of-breed products that work together. They don’t have to use a single monolithic stack.”
But while the Chime user experience may be lacking, Slack is embracing the underlying infrastructure Amazon built to power it. As part of the new deal, Slack will use Chime infrastructure to deliver voice and video calling within its application, rather than relying on its own system, which is built on technology gained in the 2015 acquisition of start-up Screenhero.
Moving to Chime infrastructure could make Slack video calls more reliable, as well as offering additional features, said Brad Armstrong, vice president of business development and corporate development at Slack.
Slack intends to enable video calling on mobile devices and add transcriptions of calls that can automatically be dropped into Slack text conversations for people to read, Armstrong said.