Amazon and Slack made a new deal wherein the former has given access to its employees for the workplace collaboration tools of Slack. Moreover, Slack will be deepening its reliability on AWS by revamping the video-calling feature to be able to benefit from the AWS service known as Chime.
Apparently, the alliance will help both the firms to challenge Microsoft, who has had its team communications service grow significantly along with Slack in the last few months. This is on account of all the schools and companies that have begun using software that can help people meet remotely at times like the coronavirus pandemic.
The growth of a firm like Slack has been steady all the while in the pandemic, however, it has not accelerated even in spite of various firms moving to be able to keep its employees home, as Slack revealed during its fiscal first-quarter earnings report. The shares of the firm have dropped by over 15% after hours.
Amazon and Slack have had a history, when Slack used to run the service on the Amazon Web Services infrastructure after it launched in 2014. It has still continued to depend on AWS to adjust its extra demand in the time of the pandemic.
The companies said that the new deal had been separately negotiated from the cloud contract of Slack and has declined to reveal the exact terms. A filing had recently revealed that Slack will be paying AWS a minimum of $425 million over a span of five years that shall end by April 2025. This is a rise from the commitment of a minimum of $250 million before this ending July 2023.
Certain teams with Amazon had used Slack earlier, but the current deal shall bring it to every employee. Amazon is known to be the second-largest private-sector employer across the U.S. with more than 840,000 part-time and full-time employees in the first quarter.