Uber ditched Slack for its employees and went to its chief rival instead

Atlassian cofoundersAtlassianAtlassian Co-Founders Scott Farquhar and Mike Cannon-Brookes

In April 2016, the New York Times reported that Uber has ditched Slack, Silicon Valley’s favourite work chat app, because it couldn’t keep pace with “thousands” of employees collaborating everywhere.

Instead, Uber switched to Atlassian HipChat, Slack’s main rival, for collaboration company-wide, Business Insider has learned.

It’s not a great sign for Slack’s ability to attract lucrative larger customers to the service and justify its $3.7 billion valuation.

Slack’s focus on helping companies cut down on email has led the company to massive success in just over two years, with even Microsoft tempted to make a takeover bid. But Slack’s weakness has always been that it’s better-suited for smaller teams, lacking certain security and identity controls necessary at global companies like Uber.

Fundamentally, HipChat, first released in 2009, offers a similar sales pitch to Slack. But HipChat is owned by publicly-traded $5 billion Australian software company Atlassian, which focuses on winning business customers. It means that HipChat already has a bunch of those vital big-business controls in place, and it’s quietly found success in that space.

Slack promises that a paid “Enterprise” edition of the service is coming in 2016, with a new set of features to help bridge the gap. And Slack has a ton of positive buzz and lots of paying customers — we use Slack at Business Insider, even.

But it’s great proof that good word-of-mouth and lots of Silicon Valley buzz doesn’t mean that it’s easy to overcome the established players in the market. And it’s probably a big jolt of confidence to Atlassian, which has largely been overshadowed by Slack’s hype for the last few years.

Slack and Uber did not respond to a request for comment at the time of publication.

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