In 2016, over 2.5 billion people used at least one messaging app. That’s one-third of the world’s entire population, with users ranging from your grandmother to your younger brother. Today, it’s commonplace for offices to use a messaging app for internal communication in order to coordinate meetings, share pitch decks, and plan happy hours. And with the latest bot technology, chat apps are becoming a hub for employees to do work in their apps without leaving the chat console.
For many people, chat apps are a given part of their workday. But how did they become so popular?
Instant Messaging: Child of the 90’s
Chat apps (and their siblings, chat rooms) may bring to mind images of the 1990s, with its dial-up internet and classic sitcoms, but commercial chat apps date back to the 1980s. CompuServe released CB Simulator in 1980, and 1985 brought the launch of Commodore’s Quantum Link (also known as Q-Link). An online service, it allowed multi-user chat, email, file sharing, and games.
If Q-Link sounds familiar, that’s because it is: in 1991, the company changed its name to America Online (AOL). But AOL wouldn’t launch its signature product, AOL Instant Messenger (AIM), until 1997. In the meantime, the Vodafone GSM network enabled the first SMS in 1992. And in 1996, ICQ launched as the first widely-adopted instant messaging platform.
The late 1990s brought dramatic changes in the chat app market. Both Yahoo! And MSN launched their own instant messengers (in 1998 and 1999, respectively), and AOL bought out competitor ICQ’s parent company, Mirabilis, for $287 million upfront, with an additional $120 million paid out later. That’s about $612.7 million today!
As AIM pioneered chatbots, like SmarterChild, it also increased its market share. Its rivalry with MSN Messenger began almost as soon as the competitor launched in 1999. By 2006, AIM controlled 52% of the IM market. Its dominance, however, was short lived. Struggling to monetize and facing increasing competition from new apps like Skype and Google Talk, AIM fell out of favor, eventually eliminating its entire development team in 2012.
With the inception of smartphones, chat apps continued to thrive; in 2013, chat apps finally surpassed SMS in message volume. By 2015, WhatsApp alone hosted 30 billion messages per day; SMS logged only 20 billion. And in the summer of 2016, Facebook Messenger hit one billion users.
The Slow Growth of Enterprise Chat Apps
Despite developing around the same time, the history of enterprise chat apps is markedly different than the story of their consumer-facing counterparts. The very first enterprise chat apps don’t enjoy the same place in our collective memory as AIM and ICQ.
Early contender Yammer launched in 2008; Microsoft acquired the platform in 2012. Clearspace began in 2006, rebranding several times until its rebirth as Jive six years later. Other enterprise chat programs, usually integrated with other social features like blogs and wikis, blipped in and out of existence.
None of this initial crop of enterprise apps proved a runaway success, and many theories exist as to why later programs have overshadowed them. One thing’s for certain: these programs predated the rise of smartphones, and mobility certainly fomented the creation of second-generation commercial apps like WhatsApp and Snapchat.
Enterprise Chat: The Next Generation
As the first decade of the new millennium closed, an enterprise chat app renaissance slowly began. Though email had been widely used for the previous twenty years, companies soon began looking for a better way to communicate quickly; email-based workflows are slower and do not allow for many business functions that are now critical to work, like screen-sharing or video calls. Some one-to-one chat applications existed, like GChat and Outlook Messenger, but group messaging applications had yet to take off.
In January 2010, three graduates of Rensselaer Polytechnic Institute—Chris Rivers, Garret Heaton, and Pete Curley—launched Hipchat, a web-based chat and instant messaging service. Shortly thereafter, Atlassian acquired it in March 2012. Its premium version addressed several enterprise concerns by adding screensharing, history retention controls, and the ability to run within corporate firewalls.
In August 2013, the enterprise chat space exploded. Slack, which stands for “Searchable Log of All Conversation and Knowledge,” grew out of an internal tool used during the development of Glitch, a defunct online game. Though not the first (or even the most revolutionary) office chat app, Slack’s growth—it now has four million users—has dwarfed most other programs. A mere 1.25 years after launching, it reached a valuation of $1 billion. By April 2015, Slack was worth almost three times that.
Slack–with its channels, DMs, and private groups–is reminiscent of IRC, which might help explain its popularity. A glut of similar apps have since incorporated these features. 2015 saw the launch of Cisco Spark, which has since evolved into an entire ecosystem of SDKs, APIs, and a developer site. Microsoft designed MS Teams to compete directly with Slack; it launched in early 2017 as an integrated component of Office 365.
As businesses prioritize digital transformation, enterprise chat apps continue to enjoy overwhelming popularity. What’s to come? Chatbots, machine learning, and increased integration are all popular with both enterprise and commercial users, who discover new ways to chat every day.
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