Conventional wisdom in software, especially in enterprise software, is the company that sells the most robust bundle will generally see the apps in that bundle become the default for customers. This has historically been proven true time and again by Microsoft. This was the basis of their main antitrust lawsuit when it became unlawful for them to bundle Internet Explorer with Windows. Even though it was inferior to Netscape in many ways, bundling IE with Windows made it logical for most people. The same wisdom has been applied to Microsoft 365/Office and that the apps in the Office bundle are more likely to be used by customers than any stand-alone piece of software. This has been the thesis for many when we look specifically at Microsoft Teams. It is believed that because Teams comes along with Windows 365, it was likely to be the default meeting, chat, and collaboration hub for most people. Results from our latest research study on workplace tools and collaboration software indicate that this is partly true and partially not true.

Our employee productivity tool and collaboration study, now in its third iteration, has surfaced insights into the tools people use to be productive in their jobs and collaborate with their coworkers. One of our main takeaways from last year’s study was how employees in an organization used a diverse set of productivity tools, often going across different suites of bundled apps. We saw organizations paying software licenses for a range of software tools and giving employees the options to use whatever solution they and their teams see fit. Each study we have run has confirmed a fascinating overlap of usage of bundled software. For example, we saw teams using Google Docs to collaborate and edit a document and then move to Microsoft Word to format and structure that document in ways that fit their end goals. We saw employees using Zoom for video and simultaneously using iMessage to text with team members in real-time. These were just a few examples of many where employees used various tools, not just one bundle of software tools, to be productive and collaborate effectively. This mix and match of workflows seemed odd at first but then made sense when put in the context of people using the best tool for the job at any point in their workflow to get the best result most efficiently.

Our most recent study yielded another example of mixing and matching tools but also brought along a clear observation that the bundled package of software doesn’t always win when another product does a better job at a task than one offered in the bundle. But, effectively, the better product will win—case in point, Microsoft Teams vs. Zoom for video meetings.

We observed a fascinating overlap of users of Zoom and Teams in our study. Zoom was the most used video meeting platform per the chart below, while Teams was the most used workplace chat platform. This was surprising initially as we looked over the data. Why would people standardize on Teams for chat and not use Teams for video meetings? Especially since employees know that chat is used synchronously during video meetings. This behavior means many employees are messaging each other on Teams while on a Zoom video meeting. Given that Teams does video meetings, the only explanation for this behavior is that more people prefer Zoom for their video meetings and have vetted it as the superior video meeting platform of the two. At the same time, Teams Chat is much more robust because of its richness, deeper integration with Office, and integration with the company backend. In this case, and for a large portion of our respondents, the better product beat the similar one that was included in the software bundle.

We did notice some nuance here based on the size of the business. Larger enterprises (1000+ employees) were more likely to use Teams for video and chat, but Zoom was still the video meeting leader even with large businesses. Small businesses (250 employees or less) were more likely to use Zoom for video meetings and Zoom chat or Slack to collaborate via chat. Regardless of business size, a diverse set of options and mixing matching tools remained constant.

Are the days of the bundled software approach over? Of course not. But the days of assuming bundled software offers advantages to the company providing it when it comes to new apps or services is likely over—for Teams, making the video meeting part of the experience more integrated into the full synchronous collaboration experience could be a way to gain back those Zoom users. While the bundle is convenient, each piece of software has to compete on its own merit in the new enterprise world where a wide variety of software tools will be offered to employees for them to choose what works best for their and their team’s workflows.

This bodes well for competition, particularly for enterprise software startups. Companies may have struggled more against an incumbent software bundle in the past. But knowing that the existence of a similar solution in a bundle does not necessarily guarantee its victory is encouraging for challengers looking to improve an experience with their solution. The trick is to be blessed by IT and be presented on the menu of software tools supported within the organization. While this is no easy task, just as Slack, it is essential for scale. But the point remains, the better product, or the better product experience, will win because at the end of the day, people want to use the easiest, most efficient, and least time-consuming solution to get their job done. 

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