Atlassian is changing its strategy and is no longer pursuing a fast track to the cloud for all its customers. Instead, it envisions a more cautious, multi-year move to cloud environments, particularly for large enterprises unwilling or unable to make such a move all at once.
The company also acknowledges that enterprise customers will never go completely off-premises and will continue to use some of their own data centers. For example, for hosting sensitive or confidential data.
In a letter to shareholders, Atlassian states that in recent years, it frequently talked about cloud migration as a top priority for the company. That was mostly about smaller customers who managed to migrate from server to cloud in a day. “As we’ve turned our focus to this next cohort of customers, we’ve shifted our mindset from ‘cloud-first’ to ‘enterprise-first'”, the Australian company stated.
Hybrid approach
While Atlassian expects many such customers to eventually move to storage and workloads in cloud environments, this will take years. “…[A]n increasing number will adopt a hybrid approach of both datacenter and cloud as they shift their teams and users over time”.
The customized approach was mentioned at the company’s quarterly results presentation. The company offers cloud capabilities and has collaboration tools in its portfolio, such as Trello, Jira, and Confluence. It also wants to move more customers toward its integrated set of tools, as customers generally tend to say that employees using all different, incompatible tools is frustrating for them.
Atlassian wants to explicitly brand its own tools as alternatives. Furthermore, it wants to improve existing cloud services and invest more effort in AI.
Departure of co-CEO Scott Farquhar
At its previous quarterly earnings presentation, the company announced that Scott Farquhar would be stepping down as co-CEO. Ever since they founded the company together, he led Atlassian for 23 years with Mike Cannon-Brookes. Farquhar is stepping down on August 31 of this year.
Cannon-Brookes will continue as sole CEO after Farquhar’s departure. Farquhar will remain involved with Atlassian on the supervisory board and as a ‘special advisor’. However, exactly what this advisor role will entail wasn’t specified in the announcement about stepping down as CEO.
Lacklustre quarterly figures
In its letter to shareholders, the company pays even more attention to Farquhar’s departure. A phrase he apparently used to address new employees was, “We want you to leave Atlassian better than you found it.” The company states that this is exactly what the departing CEO has done and thanks him for it.
Incidentally, the quarterly figures were somewhat lacklustre. Although revenue grew, the bottom line saw a net loss, at least when using Generally Accepted Accounting Principles (GAAP). The company also provided figures where it abandons this method, and then some profitability can be noted. Investors were not impressed, Atlassian’s shares fell quite a bit last Thursday.
Read also: Atlassian finally enables custom domains for Jira and Confluence