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The market for business tools such as Microsoft 365, Google Workspace, as well as Teams, Slack, Zoom, Dropbox and Webex has been booming over the past few years. With the introduction of all kinds of GenAI tools, there is going to be another shift in this area. The only question is in whose favour this shift will occur. In any case, we foresee a growth of best-of-suite adoption rather than best-of-breed. Google will therefore have to take Google Chat to the next level, and do so soon.

During Google Cloud Next, the focus was mainly on all the AI solutions on the Google Cloud platform. However, there was also a focus on Google Workspace. There was also the introduction of Google Vids, a new service that allows teams to create videos, which should partly replace presentations. It also added another AI subscription with a lower price tag, giving users AI tools in Google Meet and Google Chat.

That gave us the first signs that Google is going to invest more in Google Chat. Further investigation revealed that some Google partners already know more about this. They foresee new features for Google Chat, making it more competitive against Teams and Slack. According to Google partners, it will lead to a big migration wave toward Google Chat.

Google Chat does not yet look like a worthy alternative

If we’re being honest and look at the state of Google Chat as it is today, we do not yet see it as a worthy alternative to Teams or Slack. According to Google’s partners, the core functionality is good, but some things are still missing. Google is reportedly working on implementing those extra features. The partners further state that the number of third-party apps developed for Google Chat is rapidly increasing, bringing it more and more in line with Slack and Teams in terms of integrations.

We’re moving toward best-of-suite rather than best-of-breed

Microsoft has by far the largest market share with Teams. Microsoft owes this to bundling Teams with Microsoft 365. In contrast, the experience users have with Teams still leaves something to be desired. As a result, Slack emerged years ago, and Zoom quickly became popular as well.

We are on the eve of the introduction of GenAI in all workspace tools. Both Microsoft 365 and Google Workspace can now be enhanced with all kinds of AI features. Some organizations have already taken the plunge, while others are still taking a wait-and-see approach or find AI functionality too expensive.

Microsoft charges $30 per month per user for its Copilot offering, while Google offers three options for adding AI. First, it has a basic add-on for Google Chat and Meet for $10 per month per user. The tier above that is the Gemini Business add-on for $20, and finally, there’s an Enterprise edition for $30 per month per user.

The rise of GenAI is creating many new capabilities, but they come with a price tag as running all those AI models is not cheap. That’s why these companies are creating add-ons on top of existing subscriptions. Not only Microsoft and Google, but also Slack and Zoom are bringing AI to market in this way.

Many organizations use a best-of-breed portfolio, having chosen Microsoft 365 with Slack and Zoom on top, for example. Other combinations, such as Google Workspace with Box and Webex, are also common. These or one of many other mixed portfolios quickly rack up additional costs, especially if an organization wants to use AI everywhere. However, there is no overarching AI platform that is easy to deploy everywhere and is also well integrated. We certainly don’t see such a product like that appearing anytime soon, either.

Therefore, the choice of a best-of-suite solution, where you go all-in on Microsoft 365 or Google Workspace, will again become more attractive. Those solutions already integrate well with each other, and with the GenAI addition, they will become many times more powerful.

Chat app market share is crucial to Google and Microsoft AI strategy

The net result should benefit both parties. The introduction of all kinds of GenAI solutions will, on the one hand, increase productivity among employees, but it certainly won’t hurt Google and Microsoft either. It is important, however, that organizations not only buy into AI, but also start using it. The question, though, is how to ensure that employees actually take to the new technology. How do you ensure that organizations reap the benefits of GenAI daily?

The best way to introduce employees to GenAI is to use the software they already use heavily. Applications such as Teams or Slack are used daily by their users and are ideal use cases for a GenAI addition. Therefore, it is crucial that Google Chat gets the necessary improvements and takes on a larger role. As a provider, if you have control over employees’ chat applications, you have already found the gateway to other solutions.

We also addressed this in an interview with Yulie Kwon Kim, vice president of product at Google Workspace. Kwon Kim acknowledged that Google Chat will become increasingly important. In addition, she believes that Google is capable of taking the solution to the next level. She lists Google Meet as an example of such a development, which has been getting better and better over the years. As of now, Meet is one of the best video-calling services on the market.

Best-of-suite does not mean there is no room for other solutions

Offering an entire suite sounds like it excludes other solutions. However, Kwon Kim emphasizes that Google Workspace offers a lot of room for third-party solutions. It is a very open platform that other parties can tap into. Chat is admittedly a little trickier, although Google already has M.io as a partner that can sync chat messages in real-time with Teams and Slack.

Integration is easier for other parties. For example, as an enterprise organization, you can easily use Box.com instead of Google Drive. When a customer email comes in, you can jump directly into Salesforce, Hubspot, or Jira to pull up recent conversations, orders, or other details. This information then appears in a sidebar next to the email. This gives an employee an instant overview of what’s going on with a customer, such as which tickets or orders are still open.

If there is too much information to grasp quickly, GenAI can then lend a hand.

The way of working is going to change

The way we work will change because of GenAI, and so are the tools we use to do so. Integration of SaaS solutions with your primary applications will be critical in this regard. Ultimately, we expect this to happen more often in central applications such as Teams, Slack, or Google Chat. This means Google will have to work to take Google Chat to the next level.