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Atlassian’s software development and collaboration tools have become a growth opportunity for partners, who cite digital transformation, IT service management and cloud migration among the top drivers.
The software company is working through a couple of transitions. Atlassian is retiring its server products, which customers self-manage, in favor of SaaS offerings. Support for on-premises products ends in 2024 and partners now play a role in moving customers to the cloud. In addition, Atlassian aims to re-domesticate the company from London to the U.S., incorporating in Delaware. In a July filing with the Securities and Exchange Commission, the company listed “greater exposure to U.S. and international institutional investors” and improved access to U.S. capital markets as motivations for moving. The company’s shareholders on August 22 will vote on the U.S. plan.
A higher profile among investors could bode well for Atlassian partners, some of which have already attracted capital infusions. In July 2022, Tercera, a growth equity firm that focuses on cloud professional services, took a minority stake in Valiantys, an Atlassian consulting and services firm based in Toulouse, France. Keensight Capital, meanwhile, also invested in the company. And, earlier this year, Praecipio Consulting, an IT services firm in Austin, Texas, acquired 6kites, an Atlassian partner.
Increased adoption of Atlassian offerings among large enterprises drives Valiantys’ Atlassian business, according to company CEO Lucas Dussurget. He said that customer uptake typically happens in the context of transformation programs, such as Agile adoption at scale, DevOps and IT service management (ITSM).
“Digital transformation has been a topic of interest for the past few years,” Dussurget said. He said large enterprises, amid the COVID-19 pandemic and Great Resignation, recognized the need to implement new technologies, as well as digitize and automate their processes. They also saw the importance of deploying systems and processes to enable hybrid working and distributed teams, he added.
Atlassian likewise views digital transformation as a source of business expansion. “I think the theme of digital transformation is very real for companies all around the world,” said James Beer, CFO at Atlassian. That theme will “spur our growth rate over the long run,” he noted, speaking earlier this year during a company earnings call.
Customers’ cloud migrations also fuel partner business. “The shift to cloud is also a strong driver as we migrate larger and more complex workloads to Atlassian’s SaaS offering,” Dussurget said.
The cloud transition drives revenue growth at Atlassian, which reported its fourth-quarter financial results and outlook on Aug. 4. The company wrapped up its 2022 fiscal year with 55% year-over-year cloud revenue growth for its June-ended Q4. Atlassian forecast year-over-year cloud growth of about 50% for both fiscal year 2023 and fiscal year 2024.
The cloud story also resonates with MajorKey Technologies, a Chicago-based IT and business consulting firm that partners with Atlassian. Andrew Baumann, director of customer success and presales at MajorKey, pointed to cloud migrations as a focus for his company, noting its Atlassian Cloud Specialized status. Moving customers to Atlassian’s cloud platform lets customers take advantage of recently added features, such as Atlas and Analytics, he noted. Atlas is a teamwork directory service providing project and goal updates, while Analytics lets users access and visualize data through SQL or no-code. The product expansion rolled out at Atlassian’s Team ’22 conference in April.
Baumann also cited ITSM as a significant driver of its business with Atlassian, which provides its Jira Service Management offering in that market.
“While Atlassian has been in the ITSM space for several years, it has recently become a tighter focus for the organization,” Baumann said. Atlassian has heavily invested in its Jira Service Management product, marketing and partner enablement, he added.
In that vein, Atlassian launched in April 2022 an ITSM Specialization program to differentiate its partner ecosystem. MajorKey in July became the first company in the U.S. to obtain that specialized status, according to the consultancy.
Atlassian offers an Agile-at-scale specialization for partners, in addition to its cloud and ITSM specializations.
Atlassian’s pursuit of digital transformation among enterprises appears to be encouraging closer ties with partners.
Atlassian’s products for improved collaboration and teamwork apply to all organizations but are particularly relevant for businesses with dispersed, multidisciplinary and matrix-type team models. The software company will “continue to excel, not only within ITSM and DevOps functions, but across all functions of larger enterprises,” Dussurget said.
He said service-provider partners play a role in that enterprise context, offering an understanding of customers’ business landscapes and their digital, business and work transformation needs. “Atlassian recognizes that clients do need more than just tools,” he added.
As a result, Atlassian is increasing its work with partners to accelerate the company’s revenue growth, partners noted. Atlassian, in turn, helps partners boost their top lines and broaden their capabilities.
Edmond Delude, CEO, visionary and founder at E7 Solutions, an Atlassian partner based in Troy, Mich., said Atlassian’s channel team is expanding how it helps partners accelerate sales and expertise. Atlassian’s Cloud Specialization program, for example, “establishes partners as experts and provides partners new opportunities,” he said.
E7 Solutions became a Cloud Specialized partner in June.
Partners agree on Atlassian opportunities but differ on how the company’s pending re-domestication will affect ecosystem relations.
MajorKey’s Baumann said he views the shift as beneficial. “Atlassian is expanding their footprint rapidly in the U.S., and that is paying dividends by increasing the depth and breadth of our partnership as a U.S.-focused company,” he said.
Dussurget, however, suggested the re-domestication plans won’t change Valiantys’ relationship with the software company. “Atlassian has had a presence in the U.S. since 2005, and for a few years now, it’s been their number one employee base,” he said. “The majority of the customer-facing functions which we deal with on a daily basis — like sales and channel management — are primarily U.S.- or Europe-based already.”
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