Marc Benioff Warns of Microsoft “Playbook” After $663M Fine Over Slack Battle

The heated rivalry between Marc Benioff and Microsoft continues. For the last few months, we’ve seen Benioff chastise Microsoft Copilot and claim the company is disappointing their customers with the products they’re releasing.

And now, the Salesforce CEO is challenging Microsoft’s ethics, referencing a case from 2020 that saw the company under investigation for bundling Teams with Office 365 to edge out Slack.

Why Did Slack Take Microsoft to Court?

When Slack emerged in 2014, it quickly gained traction from its word-of-mouth marketing and freemium model, which helped them gain 500,000 daily active users in the space of 12 months. By the end of 2015, Slack surpassed one million daily users, and is now the communication hub for many large-scale enterprises, including Amazon, and Apple.

By 2021, Salesforce noticed its potential and acquired Slack for $27.7B with the aim of bolstering its position in the enterprise software market.

But the journey across these last 11 years hasn’t been plain sailing for Slack. In 2016, Microsoft strongly considered acquiring Slack but decided instead to develop their own platform, which would become Teams. Later that year, Teams was launched and was instantly integrated into the Office 365 suite at no additional cost. 

Microsoft’s approach provided its already existing customer base with immediate access to Teams, which proved to be a big hit – it recorded around two million users shortly after Teams’ release and eight million users by 2018.

This, in turn, drastically hurt Slack’s ability to grow as a platform. As shown in the graph below, adoption and use of Slack stagnated for many years, while Teams enjoyed a meteoric rise.

In 2020, Slack raised their issues about Microsoft’s bundling practices, filing a complaint with the European Commission. The complaint alleged that Microsoft had been abusing its market dominance by integrating Teams into its Office suite and limiting Slack’s ability to compete.

The European Commission would eventually charge Microsoft with antitrust violations in 2024, stating that the bundle approach gave Teams an unfair advantage and restricted customer choice. They would be fined $663M and were forced to remove Teams from the office bundle.

“You can see the damage Microsoft did to Slack before we acquired it,” Benioff said during an interview with SaaStr. “They ran their usual playbook – leveraging their assets in aggressive ways – and it’s all documented in the EU complaint Slack filed at the time. You never really know what Microsoft is going to do, but their actions then were pretty nasty.”

“I don’t admire how they used their power to go after Slack, especially when Slack wasn’t even directly competing with them.”

Is History Repeating Itself?

Benioff has long kept quiet on the matter, stating that the lawsuit was before Salesforce’s acquisition of Slack and that they had no business with it. But as the competitive rivalry between Salesforce and Microsoft continues, Benioff is now making his feelings known to the public.

Benioff described this behavior as part of Microsoft’s “playbook” and used Netscape as an example. An early competitor of Internet Explorer in the “Browser Wars”, Netscape was eventually edged out by Microsoft after the company bundled Internet Explorer with Windows.

He believes that we are now seeing this with Microsoft’s relationship with OpenAI. While Microsoft initially backed OpenAI heavily, providing them with funding and integrating the tool into Azure, Benioff has warned that we may see similar previous tactics re-emerge against Microsoft.

“You can see that playbook getting played out right now between OpenAI and Microsoft,” he said. “[OpenAI] revealed their stack for the first time – their data center, apps, APIs, all the different aspects of the future of OpenAI, and the words “Microsoft”, “Azure”, and “Copilot” weren’t on the stack. That was extremely interesting.”

While of course speculative, it does raise questions as to why Microsoft are building their own AI models and infrastructure when the relationship with OpenAI is seemingly so strong. Also, if OpenAI are omitting key Microsoft-related words from their stack, it certainly complements the narrative Benioff is attempting to build.

Final Thoughts

Whether OpenAI is the next target of Microsoft’s familiar “playbook,” or this is simply an effort to position Salesforce as the more ethical innovator, one thing is clear: Salesforce’s CEO is steadily building a case against Microsoft as the agentic AI race intensifies.

Make sure to leave your thoughts in the comments below.