Amazon and Slack team up to take on common rival Microsoft

The new deal was negotiated separately from Slack's previous cloud contract with the AWS

Slack and Amazon have announced a new partnership that will see Slack's service being used by all Amazon employees.

The multi-year agreement between the two companies also includes Slack using Amazon Web Services' Chime communications platform to support its voice and video calling functions.

Embracing the AWS Chime platform will enable Slack to move away from a system based on the technology of start-up Superhero, which it acquired in 2015. In addition, Slack will also integrate AWS Chatbot for system monitoring and messaging, AWS Key Management Service for security, and Amazon AppFlow for secure data transfer as part of the new deal.

"By integrating AWS services with Slack's channel-based messaging platform, we're helping teams easily and seamlessly manage their cloud infrastructure projects and launch cloud-based services without ever leaving Slack," Stewart Butterfield, CEO and co-founder of Slack, said in a statement.

"Strategically partnering with AWS allows both companies to scale to meet demand and deliver enterprise-grade offerings to our customers," he added.

In recent months, Slack has seen an increase in the usage of its collaboration tools as millions of people currently stay indoors due to the Covid-19 outbreak. The company added about 12,000 new paying customers in the three-month period ending 30^th April, while over 90,000 new organisations also joined Slack's free or paid subscription plans during the same period.

But Slack faces tough competition from Microsoft, whose Teams communication tool is growing at a much faster rate than Slack.

Slack has been using AWS infrastructure since 2014, and also relied on AWS to meet additional demand during coronavirus pandemic.

Both companies declined to disclose the financial terms of the new deal, but said that it was negotiated separately from Slack's previous cloud contract with AWS.

On Thursday, a filing revealed that Slack will pay AWS minimum $425 million over a five-year period ending April 2025.

The new partnership also means that Slack is unlikely to use Google Cloud or Microsoft Azure to run parts of its service in near future.

The deal will also benefit AWS, which now has an important partner for its Chime platform. The expanded partnership will also help AWS to take on Microsoft whose Azure cloud platform presently competes with AWS.

Notably, last year Microsoft barred its staff from using Slack, AWS and the Google Cloud over security issues (or so it said). While the company admitted that Slack Enterprise Grid was acceptable in terms of security, the employees were advised to use Microsoft Teams rather than "competitive software".