Microsoft’s Competitive Strategies: Slack, AI, and the Future of Enterprise Tech

In the rapidly evolving world of enterprise technology, the friction between industry giants is shaping not just the future of software, but the trajectory of innovation itself. Recent comments from Salesforce CEO Marc Benioff, as reported by IT Pro, have cast a renewed spotlight on Microsoft’s competitive practices—particularly drawing parallels between its actions toward Slack in the late 2010s and its current entanglement with OpenAI. Benioff’s warnings come at a unique crossroads for artificial intelligence, enterprise software, and regulatory scrutiny, raising urgent questions about power dynamics, market competition, and the ethics of “big tech” playbooks.

A History of Bitter Enterprise Rivalries​

The battle lines between Microsoft and its competitors have been a recurring motif in the annals of technology. From the bruising “browser wars” with Netscape in the 1990s to more recent episodes involving cloud and collaboration tools, Microsoft’s advances have both enamored customers and raised competitor ire.
Benioff’s latest accusations are not without context. In 2020, Salesforce acquired Slack, the enterprise messaging upstart, for over $27 billion—a bold bet in an already crowded market. Microsoft, four years prior, had reportedly considered acquiring Slack for $8 billion but ultimately pivoted, opting to bolster Skype and launch its own competitor, Teams. The ensuing rivalry ignited heated public and legal skirmishes, with Slack accusing Microsoft of leveraging its dominance in Office 365 to bundle Teams in a manner that hurt competition and customer choice.
While the European Commission has since opened a formal antitrust investigation into Microsoft’s bundling practices with Teams，it is clear that the competitive tension extended well beyond marketing tactics into the realm of regulatory oversight.

“You Can See the Horrible Things”: Benioff’s Stark Allegations​

During a podcast appearance with SaaStr CEO Jason Lemkin, Benioff did not mince words: “You can see the horrible things that Microsoft did to Slack before we bought it... they were running their playbook and did a lot of dark stuff. And it’s all gotten written up in an EU complaint that Slack made before we bought them.” Without delving into specifics on the podcast, Benioff’s comments underscore a longstanding suspicion within the tech industry—namely, that Microsoft has both the means and the motivation to leverage its ecosystem to the detriment of upstarts and competitors.
These tactics, Benioff argues, bear a striking resemblance to Microsoft’s “browser wars” strategy of decades past. The essential allegation: when a rival emerges with a disruptive product, Microsoft either pursues acquisition or, failing that, marshals its platform might to either marginalize or outcompete that rival.
Slack’s complaint to the European Commission, filed in 2020, remains a centerpiece of this narrative. The complaint accused Microsoft of illegal anti-competitive behavior by tying Teams into its dominant productivity suite, essentially making it difficult if not impossible for many business customers to consider alternatives like Slack without significant switching costs or technical inconvenience. Six months after the complaint, Salesforce made its defining move, absorbing Slack and potentially shifting the battleground.

Teams Unbundling: A Belated Regulatory Response​

It was not until years later, in response to mounting regulatory scrutiny, that Microsoft agreed to unbundle Teams from Office 365 and Microsoft 365 within the European Economic Area, allowing businesses to subscribe to the productivity suite without the communications platform. Many observers, including Benioff, saw this as tacit acknowledgment of the competitive issues at stake, even as Microsoft publicly maintained that it seeks only to provide value and choice to its customers.
The European Commission’s ongoing antitrust investigation, launched in 2023, highlights both how slow regulatory wheels can turn and the challenges of policing market power in the software industry. Though no final decision has been rendered as of the time of Benioff’s recent comments, the case stands as a cautionary tale about the inertia and “lock-in” effects enabled by dominant platforms.

Echoes in AI: “A Partnership is Gonna Become a Competition”​

Benioff’s warnings do not end with Slack. He argues that Microsoft’s partnership with OpenAI may be following a similar arc. While publicly celebrating a close relationship—with headlines championing the “best bromance in tech” and Microsoft investing billions in OpenAI—recent developments have pointed to increasing distance, if not outright competition, between the companies.
Reports surfaced in December 2023 that Microsoft was considering other internal and third-party models to power its flagship Copilot service, potentially reducing its reliance on OpenAI as the singular engine of its generative AI ambitions. OpenAI, for its part, recently unveiled its technology stack at a company event with no mention of Microsoft, stoking speculation that the partnership is evolving into parallel paths—or a competitive standoff.
Benioff’s assertion, “Microsoft is a company that wants to own it all, control it all... They feign an acquisition and then based on that they execute a playbook—or in the case of OpenAI, a partnership is gonna become a competition,” resonates with historic patterns. The “embrace, extend, extinguish” strategy, as some technologists have historically termed it, remains a subject of debate among industry analysts and regulators.

The Competitive Playbook: Power, Perception, and Precedent​

What exactly is Microsoft’s “playbook” as described by Benioff, and does it merit the level of concern being voiced?

The Classic Microsoft Approach​

Historically, Microsoft’s business playbook has included:

• Ecosystem Integration: Deeply integrating new tools and services into Windows, Office, and Azure, ensuring that “default” status drives adoption.
• Bundling and Pricing Strategies: Including new products in existing packages at no additional cost or at discounts, undercutting standalone competitors.
• Developer Engagement and Platform Leverage: Encouraging, or pressuring, developers to align with Microsoft APIs and standards rather than third-party alternatives.
• Aggressive Sales and Procurement: Leveraging enterprise relationships to promote Microsoft-first deployments at scale operations.
• Fast-Follow or Copycat Tactics: Rapidly developing features similar to competitors’ innovations, closing the differentiation gap and retaining customers.

Multiple industry reports and antitrust cases have substantiated elements of this strategy over time. The United States v. Microsoft antitrust case of the late 1990s, for example, found that Microsoft had illegally stifled competition in the browser market by tightly integrating Internet Explorer with Windows. The European Commission’s actions regarding Teams suggest a degree of regulatory continuity.

Recent Evidence: Teams, Slack, and OpenAI​

The rivalry with Slack is well-documented in the form of Slack’s formal complaint and subsequent coverage in reputable sources such as The Verge, The Financial Times, and Reuters, which detail both the bundling complaint and the EU’s investigation. Microsoft’s defense has typically centered on consumer choice, productivity “synergies,” and the benefits of integrated software.
With OpenAI, direct evidence of anti-competitive conduct is more nuanced and less settled. Microsoft’s investment in and partnership with OpenAI has, so far, appeared symbiotic—powering numerous Copilot and Azure AI services. However, it is reported by outlets such as Bloomberg, the Financial Times, and tech analyst Ben Thompson that Microsoft has quietly been developing complementary or substitute AI models, either in-house or through other third parties, hedging its bets against potential future conflict.
OpenAI’s public statements in early 2024, in which it revealed a technology stack without referencing Microsoft, are corroborated by multiple sources and seen as a sign that the firms are not as intertwined as public narratives might suggest.

Risks and Critiques: Is Microsoft Overreaching?​

The essential risk posed by Microsoft’s approach, as described by Benioff and echoed in regulatory filings, is that dominance in one product category (e.g., productivity suites or cloud infrastructure) can be leveraged to establish durable advantage—or even monopoly—in adjacent categories (e.g., collaboration software, AI interfaces). This raises several contentious issues:

• Market Lock-In: When customers are locked into bundles or integrated suites, it becomes difficult for innovative new entrants to gain traction, stifling competition.
• Innovation Stagnation: Critics claim that when dominant firms copy or undercut upstarts, the incentive for innovation declines, and the industry ossifies.
• Regulatory Capture: The complexity and scale of big tech firms can slow or dilute the impact of regulatory action, rendering it more symbolic than substantive.
• Consumer Impact: Proponents argue that deep integration and bundling drive down costs and improve user experience, while critics see hidden costs and reduced choice.

It is important, however, to handle these claims with balance. Some industry analysts defend Microsoft’s actions, noting that integrating collaboration tools with productivity suites is both logical and increasingly demanded by customers. Bundling is not per se illegal; what matters is the effect on competition and customer outcomes. As seen in both the U.S. and EU responses, the bar for “illegal” bundling centers on whether customers are unfairly impeded from considering alternatives.

Strengths: Microsoft’s Competitive Edge​

From a technology and business standpoint, Microsoft has demonstrated a remarkable ability to scale, adapt, and out-execute. Its rapid adoption of generative AI into core applications—Copilot, Azure AI, and more—has set a pace that competitors both envy and struggle to match. Microsoft’s cloud-first transformation under CEO Satya Nadella is widely regarded as one of the most successful pivots in tech history.
Other notable strengths include:

• Massive Installed Base: Nearly every major business in the world relies on some combination of Windows, Office, or Azure.
• Cloud and AI Prowess: Microsoft has invested tens of billions in GPT-like models, cloud GPU infrastructure, and developer tools.
• Integration and Security: Businesses benefit from federated security and compliance frameworks tied to single-vendor solutions.

For customers, the benefits are often tangible: reduced IT friction, single-pane management, and seamless cross-app experiences.

The Broader Industry Context: Competition Amid Concentration​

While the Microsoft-Slack-OpenAI saga is the latest skirmish, it is part of a much larger story about dominance and disruption in the age of cloud and AI.
The “winner-take-most” dynamics of technology have concentrated power and capability in the hands of a few players—Microsoft, Google, Amazon, Apple—each with the resources to compete on infrastructure, software, and increasingly, frontier AI. The push and pull between innovation and integration is accelerating.
Key questions that now face regulators, enterprise buyers, and the industry at large include:

• Will generative AI repeat the network-effects logic of office productivity and cloud, entrenching a new layer of gatekeepers?
• Are antitrust regulations equipped to handle the rapid iteration cycles and blurred lines between “partnership” and “competition”?
• What can smaller firms, startups, and open source projects do to survive—let alone thrive—amid such concentrations of power?

Balanced Verdict: Navigating the “Dark Playbook” Allegations​

While Benioff’s claims draw on a rich history of friction and regulatory concern, it is crucial to note that not all competitive integration is illegal—or even undesirable for customers. Microsoft, for its part, continues to deny wrongdoing in both the Slack and OpenAI cases, maintaining that it prioritizes value, security, and choice.
Yet, if history is any guide, scrutiny will remain intense:

• The EU’s willingness to investigate and demand changes in bundling and interoperability sets an international standard.
• Salesforce’s and Slack’s advocacy has forced a level of transparency and debate that may not have existed otherwise.
• OpenAI’s increasing independence from Microsoft investment and infrastructure, whatever the ultimate outcome, suggests a future where partnerships are conditional and dynamic rather than monolithic.

A reasonable conclusion is that Microsoft’s “playbook” is neither wholly villainous nor wholly benign. Its scale creates both opportunity and peril: innovation baked into every Windows update, predictive intelligence everywhere, but also the specter of foreclosed opportunity and stifled competition. Customers, partners, and regulators must remain vigilant, ensuring that “integration” does not simply become the new face of lock-in.

Looking Ahead: What to Watch​

The road ahead will likely be determined by a combination of legal decisions, technology shifts, and the flexibility of both incumbents and challengers.

For Enterprises​

• Be Informed, Not Just Enthralled: The allure of seamless integration should be weighed against long-term contract conditions, migration costs, and vendor lock-in risks.
• Demand Transparency: Push providers to explain how integrations and bundling impact data portability and interoperability.
• Foster Multi-Vendor Environments: Even if one suite dominates, keep alternative tools and providers in the mix to avoid dependencies.

For Regulators​

• Move Faster: The pace of innovation in AI and cloud services requires more agile, tech-savvy oversight.
• Monitor Partnerships: The shifting sands of joint ventures, licensing, and investment need ongoing scrutiny for anti-competitive effects.
• Champion Open Standards: Encourage APIs, data formats, and frameworks that allow meaningful switching.

For Innovators​

• Embrace Differentiation: Focus on unique features, integrations, or user experiences that giants are unlikely to replicate immediately.
• Build Community and Champions: Leverage customer advocacy and open ecosystems as bulwarks against brute-force competition.
• Stay Nimble: Prepare to pivot business models and go-to-market strategies as market dynamics shift.

Conclusion​

The fight over Slack, Teams, OpenAI, and Copilot is not merely a tale of business rivalry—it's a case study in how power is wielded, challenged, and ultimately checked within the digital economy. Marc Benioff’s warnings, while pointed and perhaps colored by his competitive vantage point, are not without foundation; history is replete with examples where unchecked integration becomes anticompetitive in effect, if not intent.
Yet, the story is far from over. Both market forces and regulatory bodies are evolving. Companies like OpenAI are increasingly aware of the perils and incentives tangled within big tech partnerships. And buyers, emboldened by a broader understanding of the stakes, are asking sharper questions.
In the end, whether Microsoft’s playbook is “pretty nasty” or simply ruthless efficiency will depend on the vigilance of all stakeholders—because, in technology as in all fields of power, playbooks are only as destructive or constructive as the systems that constrain them.