Slack is showing promising growth prospects in industries like retail, media, healthcare and financial services this year, argue analysts at equity research firm William Blair and Co. These prospects suggest that the competition from Microsoft’s rival Teams chat app may not be as as significant as originally thought.One big reason why is Slack’s specialized security and compliance features which could help it make inroads into healthcare and financial services companies.Other analysts have argued that Microsoft’s dominance in enterprise will make it hard for Slack to add customers beyond its core small business customer base. Click here for more BI Prime stories.Slack is showing promising growth prospects this year, which may suggest the threat from Microsoft’s rival Teams chat app may not be as significant as originally thought, say analysts at equity research firm William Blair and Co. Key to Slack’s future growth is being able to gain customers in markets other than tech, and it’s showing success in markets like retail and media and making progress in industries with strict regulations like financial services and healthcare, writes Bhavan Suri, an analyst at William Blair, in a research note following a visit to Slack’s headquarters. He points out that Slack’s ability to offer specialized security and compliance features is helping it appeal to potential customers in healthcare and financial services where there are strict rules around how employees communicate and deal with sensitive information. “Slack’s advanced functionality in security and compliance (such as its Enterprise Key Management technology) is resulting in more strategic conversations with these customers. While the company is still in the land phase in these regulated industries, there is potential to go wall-to-wall here in the future,” Suri said. Shares of Slack have fallen by roughly 40% since the company became publicly listed in June. Given that, Suri also said the looming threat from Microsoft Teams may be less worrisome than some think. Teams users have been migrated from an older product called Skype for Business and it is bundled into Office 365. Teams now has 20 million daily active users as of November, as opposed to Slack’s 12 million daily active users. Suri said the fact that users typically didn’t choose to start using Teams, in the same way users started using Slack, means those users could still convert to Slack. “This lack of purchase intent, combined with lower user engagement once implemented, leads us to believe there is relatively less stickiness with Teams and a higher chance of conversion to Slack,” he said. “Instead, there is still a possibility that many of the 20 million daily active users (DAUs) on Microsoft Teams can become Slack customers at some point in the future.”Slack has responded to Teams rapid user growth by highlighting figures that show how much more engaged users are on their platform. Slack CEO Stewart Butterfield has also criticized the user growth as not organic and called Microsoft an “unsportsmanlike” competitor. Other analysts have argued that given Microsoft’s dominance in the enterprise space, Slack will struggle to grow beyond its core small business customer baseto larger enterprise customers. Suri notes that Slack is investing heavily in sales and marketing as a way to move beyond its typical freemium model that worked for tech companies. “With investment in lead gen and increased market education, the company is aiming to accelerate the pace of customer adds as there is still plenty of opportunity to grow the customer base,” he said. “As long as Slack continues to execute on its growth strategy over the next few quarters and delivers fundamentally sound results, we think the overhang will gradually lift.”Got a tip? Contact this reporter via email at firstname.lastname@example.org or Signal at 925-364-4258. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.