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In July, barely a month after officially launching in India, Slack decided to make an unorthodox move. For the first time in nine years, the US-based workplace collaboration and messaging app raised the prices of its ‘Pro’ offering. The price rise, around 9%, was done to “reflect added value” and “ensure investment in innovation”, according to a list of FAQs the company put out.

Slack’s Pro offering and its free version are both essential channels for customer acquisition worldwide. The number of companies using Slack globally as of 2021 is just a quarter short of one million. But India is special—for years, Slack has pursued a deep discounting model, offering a 62% mark down on dollar prices.

Continuing the discount was also inevitable, multiple executives in the software as a service (SaaS) space told The Ken. The executives and others in the industry The Ken spoke to declined to be identified as they did not want to comment publicly on Slack. India is known to be notoriously price sensitive—it’s one of the firm’s largest largest Economic Times Slack counts India among its top 10 markets: country manager Rahul Sharma Read more  free-user markets. The hefty discounting will continue with the elevated pricing as well, Slack has indicated, as it continues to expand its India sales team. 

The Pro offering will now cost nearly Rs 700 (US$8.75 ) per person per month. With the discounts, India could get the Pro version for just Rs 262 (US$3.31). It also sweetened the deal for free users. Instead of a 5GB storage limit and a 100,000-message limit, Slack now offers unlimited storage and messages for 90 days.

Slack has some pretty big names in its net. Larger startups like Meesho; listed foodtech Zomato; old tech hands like TCS and Wipro; big tech companies like IBM, and Oracle—all of which have sizeable Indian workforces use Slack. 

But for years now, the company has been fighting off a deep-pocketed rival in the country—Teams. Software behemoth Microsoft launched the office collaboration and messaging application in 2016, a whole three years after Slack’s launch, and managed to overtake overtake The Verge Microsoft Teams overtakes Slack with 13 million daily users Read more  Slack in terms of users in 2019. Teams, in its most basic paid version, is cheaper than Slack Pro. It also comes bundled with the company’s extremely popular Microsoft 365 solution, which includes everything from word and data processing to email. 

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Meanwhile, a large chunk of Slack’s customer base—free users—likely doesn’t make the company any money.

AUTHOR

Soumyajit Saha

Soumyajit covers the operations of Big Tech companies and OTTs in India. Before The Ken, he covered equity and currency markets in Southeast Asia, Australia and New Zealand for Reuters. You can hit him up via email about anything, except money he allegedly owes you.

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