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Atlassian Is Primed to Widen Its Appeal Beyond IT

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Atlassian Is Primed to Widen Its Appeal Beyond IT Seth Agulnick, [email protected] REPORT Atlassian Is Primed to Widen Its Appeal Beyond IT Companies: CA, CRM, GOOG/GOOGL, HPE, IBM, JIVE, MSFT, NOW, ORCL, TEAM, ZEN February 11, 2016 Report Type: Initial Coverage ☐ Previously Covered Full Report ☐ Update Report Research Question: Will Atlassian’s workflow tools continue to grow quickly with software development teams while also expanding into new use cases? Summary of Findings Silo Summaries . Atlassian Corp. Plc’s (TEAM) tracking and collaboration tools, widely 1) Atlassian Software Users considered the best-in-class for software development, are gaining JIRA and Confluence are both effective tools for team traction among nontechnical teams. collaboration. JIRA can be customized to suit nearly any team’s development process, though setup is . The company’s two flagship products, JIRA and Confluence, are complicated. Confluence is much easier to use and slowly being rolled out in departments like human resources, sales, tends to be deployed more widely. Atlassian’s biggest customer support and product management. These represent a advantage is the way all of its software pieces work together. Atlassian products—which already are being much larger market than Atlassian’s traditional core in IT. branched out beyond software development—can grow . JIRA was praised for its flexibility and advanced customization even further with business teams. options, though the latter trait makes setup and maintenance a challenge. It has great potential for sales growth with any business 2) Users of Competing Software Three of these five sources said Atlassian’s JIRA is not team that needs to track numerous tasks through a multistage the right fit for every company. A fourth source said JIRA process, provided Atlassian can make it simpler out of the box. probably is the best available tool for software . Atlassian’s Confluence is easier to use and less expensive than its development but that his team has not switched to it because of the time and effort required for setup. The biggest competitor, Microsoft Corp.’s (MSFT) SharePoint. remaining source said his company could save money Confluence is picking up steam as an internal company wiki and by switching to JIRA but is satisfied with VersionOne. document management platform, in some cases reducing One source thinks open-source alternatives are employee reliance on email and certain Microsoft Office programs. Atlassian’s biggest threat. Confluence got high marks as a companywide collaboration tool. One source who . Atlassian’s biggest obstacles include deeply embedded solutions uses Slack said HipChat needs better search and from providers of broader enterprise suites, such as IBM Corp. notification features. (IBM), as well as the wide availability of free open-source tools that are not as robust as Atlassian’s but are adequate for many uses. 3) Atlassian Channel Partners Atlassian’s software is flexible and easy to use, and the . Although some competitors come close to or even surpass company’s active third-party marketplace is a key Atlassian’s technology for individual products, no single challenger advantage over competitors. Confluence is the best matches its complete portfolio of well-integrated collaboration software on the market for managing documents and tools. The company also benefits from a vibrant marketplace of organizing content. It is easier to use than SharePoint third-party vendors developing add-ons that extend the versatility of and less expensive than both SharePoint and Jive. its software and create stickiness as they build up over time. Collaboration tools like Atlassian’s are often difficult to displace once a company starts using them. Slack and . Atlassian’s messaging tool, HipChat, is losing the battle to rival HipChat are comparable, but Slack seems to be winning Slack. HipChat’s main advantage over Slack—easy integration with the marketing battle. Atlassian has great potential to other Atlassian tools—is not enough to get companies to switch. expand beyond technical teams. Atlassian’s decision to split JIRA into three products could be a 4) Industry Specialists good step toward breaking into nontechnical teams. Still, the JIRA Atlassian is well suited for wider enterprise use, as Service Desk version may be experiencing some growing pains as it evidenced by JIRA’s popularity with project leaders, takes on established solutions from Zendesk Inc. (ZEN) and engineering teams and product managers. Although ServiceNow Inc. (NOW). time and expertise are needed to configure Atlassian’s tools, experienced users become big fans. Atlassian has room to raise prices for its large enterprise clients. HipChat has been losing share to Slack but still has strong potential among teams using other Atlassian tools. 1 301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com Atlassian Corp. Plc TEAM’s Strength of Strength of Growth JIRA Confluence Potential Outside of IT Atlassian Software Users Users of Competing Software Atlassian Channel Partners Industry Specialists Background Australia-based Atlassian, which had its initial public offering in December, makes software to help teams collaborate. Its flagship product, JIRA, is widely used among IT and software development groups. JIRA and Confluence, the wiki-style document-sharing software, account for about two-thirds of Atlassian’s revenue, which has been growing nearly 50% per year during the three fiscal years prior to its IPO. The company said its fiscal second-quarter revenue was up 45% year to year and that its revenue for the fiscal year ending in June will be about $445 million, up 38% to 40%. Atlassian has a very small direct sales force, choosing instead to sell its products mainly through self-serve online channels and through a series of third-party vendors, some of which also develop plug-ins to increase the functionality of Atlassian’s software. These vendors provide much of the support for Atlassian, including implementations, training and troubleshooting. Although its products initially were geared to software developers, Atlassian is trying to expand into other parts of the enterprise. In October, it split JIRA into three products: JIRA Software for software teams, JIRA Service Desk for IT and service teams, and JIRA Core for business teams. Atlassian also has been trying to increase use of its HipChat messaging tool as part of its effort to become more widely used across companies. Competitors with software development tools are plentiful and include VersionOne, CA Inc.’s (CA) Rally and IBM’s Rational. For broader collaboration tools, Atlassian finds itself up against the likes of Alphabet Inc.’s (GOOG/GOOGL) Google Docs and Microsoft’s SharePoint. Also of note are the many free, open-source alternatives like GitLab and Jenkins. Current Research Blueshift Research assessed whether Atlassian could continue to grow among software developers while also bringing in different business teams. We employed our pattern mining approach to establish five independent silos, comprising 21 primary sources and seven relevant secondary sources focused on uses of Atlassian tools outside of software development, reviews of JIRA Service Desk, and the battle between HipChat and Slack: 1) Atlassian software users (9) 2) Users of competing software (5) 3) Atlassian channel partners (6) 4) Industry specialists (1) 5) Secondary sources (7) Next Steps Blueshift Research will further assess Atlassian’s outlook for winning large enterprise deals. We also will take a closer look at how the split of JIRA into three products is being received by end users, especially those who might consider JIRA Service Desk as an alternative to Zendesk. 2 301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com Atlassian Corp. Plc Silos 1) Atlassian Software Users Atlassian’s leading products, JIRA and Confluence, are both flexible and effective tools for various team collaboration tasks. JIRA, used mainly within these nine sources’ IT and software teams, can be customized to suit nearly any team’s development process. That broad configurability, however, complicates the initial setup and the system maintenance. Confluence is much easier to use and tends to be deployed more widely, often as a companywide wiki for managing content. Atlassian’s biggest advantage is the way all of its software pieces work together, but that integration is not enough of a catalyst for companies using Slack as a messaging tool to switch to Atlassian’s HipChat. Still, Atlassian products—which already are being branched out beyond software development—can grow even further with business teams, especially if the company can make JIRA easier to initiate and more targeted toward specific business functions. Splitting JIRA into three versions was a smart move toward that end. Some larger enterprise clients want more direct support and better responsiveness than what Atlassian offers. Meanwhile, many open-source products compete with some or all of JIRA’s and Confluence’s functions. Such free tools generally are not as robust or comprehensive but sometimes are good enough. Key Silo Findings Atlassian - 9 of 9 sources use both JIRA and Confluence; 4 said JIRA is used mainly within IT teams while 6 said Confluence is more widely deployed. - 3 said JIRA’s flexibility and configurability are great strengths but make it challenging to set up and maintain. - 3 said Confluence is a great tool that is easy to use by teams throughout an organization. 1 complained that it is difficult to format and manage pages within Confluence. - 2 said HipChat is a good messaging tool but not good enough to displace Slack. 1 said he would like to replace various messaging systems in use at his company with HipChat. - 1 complained about the lack of email customization in JIRA Service Desk. - 1 said Atlassian’s Bamboo is better than Jenkins at encouraging good development habits. - 3 offered mixed reviews of Atlassian’s support, including 1 who thinks the company should develop closer relations with its biggest customers. - 2 said the lack of compatible plug-ins is a drawback with cloud-based versions of Atlassian’s software.
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