Recently, Meta has announced its plans to shut down Workplace, a collaborative software tool.

I’d worked at Workplace myself for some time and had closely followed developments in the collaborative software market for the past several years (you can find my essays on the subject here and here).

So here is my take on why Zuckerberg decided to pull the plug on Workplace.

Share in total revenue

To date, Workplace has reached hundreds of millions in revenue and many millions of paying customers. That’s a phenomenal success for any stand-alone company… but Workplace isn’t.

However impressive the revenue figures of this project may sound, they’ve been generating less than 0.5% of Meta’s total revenue ($135 billion in 2023). Close to nothing for a mega-corporation like Meta.

Foreignness

Workplace never fit in the value generation chain of other successful Meta products—social and viral B2C products. Instead, it gravitated towards an Enterprise model, which requires a huge sales team, customer success managers, and other unique features of this business model.

All in all, Workplace had been foreign to Meta’s ecosystem right from the start.

Fierce market competition

It would not be an exaggeration to say that Microsoft, with its Teams, now completely dominates the collaborative tools market. During the pandemic, Microsoft found itself in a rather advantageous position and managed to attract a huge chunk of customers who had still been using email and other outdated tools for work collaboration. All that seriously harmed the opportunities for other major market players, including Slack and Workplace. Check out my essays (here and here) for a deeper analysis.

Zuckerberg’s final decision

For Mark Zuckerberg, the company’s focus is paramount. My guess is, considering all the factors above, he concluded it’s better to cut a small part of Meta’s revenue than to keep a business with limited prospects and an inherently misaligned nature.

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