Notion is creating some well-deserved buzz in collaboration. Users are finding the app to be a digital Swiss Army knife for productivity and collaboration. It’s a versatile tool, and since November 2023 has offered AI for integrated assistance with writing, brainstorming, and more.
Established in 2013 by Ivan Zhao and Simon Last, San Francisco-based Notion organically built a dedicated, global following. Its dynamic workspace combines project management, note-taking, and data organization. It’s a cloud-native service with collaboration at its core. Notion is a startup and is not the only one offering a fresh take on office productivity. Other apps include Coda, Salesforce Quip, and Zoom Docs.
These products merge the flexibility of a versatile digital workspace with elements drawn from the traditional office suite. The user-friendly design provides a blank canvas for customization that resonates across a diverse user base. Notion COO Akshay Kothari stated an early vision for Notion was to empower users to create programs beyond the company's initial imaginings.
Notion’s grass roots support is impressive. A global cottage industry is emerging to provide Notion courses, guides, and templates as well as hosting meetups and events. Notion's impressive growth, scaling from a beta version to more than an estimated 20 million users in just 18 months, aligns with the rise of remote work and team collaboration. However, Notion’s best days may be behind it.
Last spring, Microsoft introduced the public preview of Microsoft Loop, and the application is accessible to all customers using Microsoft 365 Business Standard, Business Premium, E3, and E5, both on web and mobile platforms. Loop shares many similarities with Notion, as well as Coda, Quip and Zoom Docs (which launched in October 2023).
Microsoft is a “startup cancer,” wrote AL Anany. “Teams did it with Slack. Now they’re going after Notion with Loop.” Anany said “Microsoft launched Teams to eradicate their users’ need to use Slack.” Slack’s first-mover advantage has not stood up to Microsoft’s bundling advantage. Teams overtook Slack in just about every measurable way, and Slack was much larger pre-Teams than Notion is now.
Notion’s prospects and customers will have a similar dilemma as Slack’s customers did. Why purchase Notion separately when the Microsoft version is included? You could argue that the Notion app is better, and it might be, but that’s not enough. Microsoft is integrating the (arguably) best AI that currently exists (not invented at Microsoft) into Loop.
Imitation, they say, is a sincere form of flattery, and the practice is common in tech. Steve Jobs reminded us that “Good artists copy, great artists steal, and we have always been shameless about stealing great ideas.” Apple openly borrowed ideas from Xerox.
However, imitation is more threatening when Microsoft does it. In July 2020, Slack filed an antitrust complaint against Microsoft with the European Commission stating that “Microsoft has illegally tied its Teams product into its market-dominant Office productivity.” Even before acquiring Slack, Marc Benioff of Salesforce railed against Microsoft’s “anticompetitive bundles.”
Takeshi Numoto, recently promoted to Microsoft CMO, is known as the “baron of the bundle.”The Information reported that Numoto’s cloud version of the bundle has become the envy of the business world—and a force that countless rivals revile and fear. “His strategy turned Microsoft’s cloud business into an unqualified success, lifting cloud revenue to $140 billion in the year to June 2023 from $8 billion in 2015.”
Additionally, “Numoto utilized Microsoft’s licensing agreements to make it more expensive for customers to use Microsoft’s popular apps and services on clouds that compete with Azure, such as Amazon Web Services and Google Cloud.” Today, Microsoft is the second most valuable company in the world, behind Apple.
This is why there’s so little innovation in office productivity. The risk/reward ratio scares off startup investors. Almost every major service at Microsoft imitates something that came before it, even Azure (AWS) and Office365 (Google Apps). Many of these pioneers are long gone (Lotus, Novell, Harvard Graphics, Netscape, and more). Exchange, too was a late arrival to the email sector.
Office productivity is ripe for a new way of working. The big benefit that many vendors are working toward is reduced app switching. These new apps (Notion, Coda, Quip, Zoom Docs, etc.) take a modular approach to work and collaboration that includes customizable content blocks. They have traditional document capabilities but touch on other application areas, such as project management and content publishing.
Microsoft Office was born before the cloud and even before offices were networked. Networking has long since been added, but are separate office apps and formats still appropriate today? Also, the recent developments in AI have many of us reevaluating our workflows. For example, a meeting summary can initiate a new, collaborative workspace in Zoom Docs.
Rather than integrating or changing Word and Excel, Microsoft is developing Loop as a separate app, at least for now. This allows Loop to evolve without impacting or disrupting the status quo. Eventually, Office may find itself in a similar situation as Diet Coke today which defends its share from traditional competitors as well as Coke Zero. Competing with internal brands can be harder than external competitors.
These changes are positive for office workers but probably don’t bode well for Notion. Any competition can be tough, but we are talking about one of the most valuable companies in the world launching a similar product, improving it with advanced AI, and then making it available to about 345 million users for no additional charge. Of course, the future is unwritten and perhaps Notion will be victorious.
Dave Michels is a contributing editor and Analyst at TalkingPointz.
Editor’s Note – check out the following:
