Atlassian Corp. sells its corporate chat software to rival Slack Technologies Inc. and takes a small effort at the start, as they face greater competition from Microsoft Corp.
Slack will pay an unfinished amount over the next three years to acquire Atlassian HipChat and Stride products, said CEOs from both companies. The final director Stewart Butterfield described both the payment and investment of Atlassian in the company as "nominally" economic, but important strategic. He refused to elaborate on the former.
The agreement gives Slack more customers, most of whom pay a monthly service fee, and allow Atlassian to terminate a business that has not generated as much demand as expected. Combining the two companies supports Slack at a time when Microsoft runs a competing product called Team to some 1
Taking a competitor is good for Slack, Butterfield says: "There are fewer choices for people."
The agreement allows each company to focus on the area they lead – Slow down in chat rooms and Altassian in project management software. The two companies already share a lot of customers. Hundreds of thousands of groups using Atlassian products like Jira and Trello have Slack accounts, "said Atlassian, CEO Mike Cannon-Brookes. These include Capital One and NASA's Jet Propulsion Laboratory.
Atlassian, who will define the agreement in the quarterly performance report Thursday, said that the effect of lost revenues will largely be counteracted by Slack's payments over the next three years. Although HipChat featured Slack, the younger company quickly added more features and attracted more users. "Hipchat and Stride do not do as well as any of Atlassian's other products," said Wayne Kurtzman, an analyst at IDC. Atlassian shares jumped as much as 18 percent in expanded trading after the news.
Atlassian made a last blur less than a year ago to keep up with Slack and Microsoft in chat software . In September, it attempted to move HipChat customers into a new product that combined several of the features that Slack and Microsoft have added in their chat services. Called Stride, the app offers audio and video conferencing and project tracking. When not enough users appeared, Atlassian entertained the idea of a sale. "We are very proud of what the team has built," said Cannon-Brookes. "But at the same time it's a crowded room and it's a pragmatic alternative there."
Two months ago, Atlassic President Jay Simons Butterfield met at breakfast and asked if he wanted to get the chat business, Butterfield said. . The two companies had previously collaborated with software projects and shared congratulations of baking goods to celebrate product releases, said Cannon-Brookes. The deal marks the first time that Atlassian makes a strategic investment in another company, he said.
Atlassian will continue to manage the chat products and the shoppers' customers are closed in February. Customers with HipChat installed on their own servers will be able to use it for several months or as long as two years, depending on the version.
Slack and Atlassian will make it easy for customers to move, but they won & # 39; Do not be forced to swap, "said Butterfield. He expects most to transition, but adds "single digits" as a percentage of Slack's market share. Butterfield and Atlassian refused to say how many people use HipChat and Stride. Microsoft claims that 200,000 organizations use law. Slack said that it has 500,000, a total of 8 million people who use the service every day. Three million of these accounts are paid.
( Updates to Atlassian Shares in the Sixth Paragraph. )