
Atlassian Valued at $3.3 Billion - asaddhamani
http://blogs.wsj.com/digits/2014/04/08/atlassian-valued-at-3-3-billion-selling-business-software-sans-salespeople/
======
rgrieselhuber
This is a company that was founded in 2001.

I still remember their CEO building his original audience on
TheServerSide.com, back when Enterprise Java was the thing.

They took 13 years to get to this point, a solid 8-9 years longer than most
enterprise SaaS companies are expected to take (by VCs). And yet, not a single
VC I've asked if they wish they were in Atlassian has said no.

You can build huge companies on your own terms and you don't have to swallow
the story that everybody tries to feed you. You do need to do one thing though
(and only one thing): get traction and keep it growing.

~~~
tluyben2
Can you give examples of SaaS companies which did that in 4-5 years; I know
you said 'by VCs', but i'm curious.

~~~
fjaved
Veeva Systems (VEEV) took just a touch longer at 6 years and did it with
remarkable capital efficiency. Founded 2007. Raised $4m from VCs. IPO in 2013.
Opened at $2.4b mkt cap, closed day at $4.5b, $5.6b today.

~~~
rgrieselhuber
I just came across their story the other day - really inspiring. I'd love to
hear the full story of how they did it. They are in a super specialized
market, so I'm guessing that helped.

~~~
pinaceae
yes, we are tackling a single vertical, life sciences - with multiple SaaS
products. the core vision is the industry cloud.

by being super specialized, the cost of sale is massively lower. no need for
an army of sales people. focus is on product and delivery/implementation -
once it is proven that your stuff actually works, others take notice in a
tightly knit industry.

Eli Lilly, one of our customers, just got awarded for their innovation around
using our products: [http://www.informationweek.com/strategic-cio/executive-
insig...](http://www.informationweek.com/strategic-cio/executive-insights-and-
innovation/eli-lillys-field-reps-armed-with-data-/d/d-id/1141542)

~~~
rgrieselhuber
That's really interesting. I'd love to ask some questions - if you don't mind
emailing me (address is in profile).

------
bane
I don't know why, but this makes me feel good. Like a world that makes sense.
A regular old business, that makes money and continues to grow and make more
money, gets valued on a nice speculative curve, doesn't make useless dodads or
chat apps or whatever and went from $0 to $xx billion valuation in a couple
years because it has some possible tangential business tie in with somebody
else, but instead makes something useful.

It feels like the universe makes sense again.

~~~
zevyoura
>doesn't make useless dodads or chat apps or whatever

To be fair, Atlassian makes HipChat, and though it's not exactly the
foundation of their valuation it is a pretty significant product.

~~~
schneid
To be fair, Atlassian _bought_ HipChat :)

~~~
zevyoura
They bought Crucible and Bitbucket too, doesn't make them any less an
Atlassian product.

~~~
voltagex_
I didn't even realise BitBucket wasn't originally an Atlassian product. What
do you think makes it seem so seamless, or what makes Atlassian so good at
integrating new products?

~~~
kisielk
TBH I would say they are "ok" at integrating products. Until last year I
worked at a company that used Atlassian products, and while they worked well
together there were definitely a lot of points of integration that were
missing which we felt should have been there. It's been getting better over
time, but it's definitely not seamless.

------
dangoor
First sentence in the article: "Atlassian, an Australian maker of online
collaboration tools for businesses, is gunning for the same market as fast-
growing startup Box Inc."

Saying that they're gunning for the same market seems a stretch to me. No
one's going to say "I was thinking of buying Jira, but I just went with Box
instead."

Leading off with drawing parallels between Atlassian and Box just strikes me
as not helpful.

edit: grammars

~~~
capkutay
That might have been a slight misunderstanding on the writer's part, but I'm
sure the atlassian guys are considering box's market as well. If a company is
already spending money on Jira and stash for developer collaboration, wouldn't
offering content management as a product be compelling? If the engineering
department at a company is heavily invested in atlassian products, maybe
marketing or sales would give their cloud content sharing product a shot too.

~~~
iancarroll
Well, content management is handled by Confluence.

------
malanj
Really cool that you can reach that kind of valuation with a basket of
products, rather than a single run-away network effect fueled win. I find it
very inspirational that they do that well by building great software that
people love.

also: They really make awesome products (we use BitBucket, HipChat and
Confluence)

~~~
dopamean
Did they acquire HipChat or was that home grown?

~~~
daigoba66
BitBucket and HipChat are fairly recently acquisitions, but fit perfectly in
their portfolio. Some of their lesser-used products are also acquisitions.

~~~
daveoflynn
Many of the products were acquisitions, though often at a very early stage in
the product's lifecycle. Off the top of my head, acquisitions: HipChat,
Bitbucket, GreenHopper (now JIRA Agile), SourceTree, FishEye, Crucible,
Clover, Crowd, Bamboo.

~~~
tomjadams
Cenqua is the company that had fishey, crucible & clover. About 5 people when
they bought it, and probably their first acquisition.

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polskibus
They do seem to be the best in a very competitive market. There are loads of
either commercial or open source issue trackers, wikis, combinations of both,
etc. etc. How will they grow past that ? Acqusitions? Writing custom JIRA
plugins that will make it more like an ERP ? Ideas?

~~~
raverbashing
> There are loads of either commercial or open source issue trackers, wikis,
> combinations of both, etc. etc

Yes, and they all suck. They go from a pain to use (Bugzilla) to a huge
mountain of useless and worthless crap with a obscene price tag (Rational
tools)

It seems to me they are in the right path

~~~
eropple
_> Yes, and they all suck._

Redmine ain't bad.

~~~
polskibus
I love redmine, it's been really good and 0 upkeep for my company for a couple
of years now.

~~~
latortuga
I hope you don't mean literally zero because there have been numerous Rails
vulnerabilities in the intervening time. If you're been running the same
instance for a few years unpatched and publicly accessible, chances are good
your installation is owned.

~~~
polskibus
Not my case. I didnt mean literally zero but we never hit a bug.

------
dkarapetyan
I don't understand any of this. Every atlassian product I have ever used has
been terrible. All their software is full of performance issues, uncountable
UI bugs, and every time we upgrade it's impossible to tell whether we lost any
data in the process and several times we have lost data. Their continuous
integration server, Bamboo, is pretty to look at but unusable except for the
lightest of use cases. The message broker between master and slave constantly
goes down, publishing artifacts is hit or miss based on various network
conditions that are mostly out of my hands because we're in AWS and I think
they use chunked encoding to transfer the artifacts.

Honestly, if they're worth $3.3 billion then the software industry is doomed.
Maybe that's a bit over the top but the quality of the products based on what
I read doesn't add up. How can you do so much R&D and still have a product
that's so unstable and can't handle simple network hiccups?

~~~
i386
Sorry to hear that you are having trouble with Bamboo. I'm Product Manager for
Bamboo at Atlassian, so I'd be interested in looking into the problems and use
cases you are having issues with. Feel free to drop me a line at
james@atlassian.com and ill setup a time to give you a call.

~~~
rplnt
Any basic functionality found elsewhere would be helpful really. It might
integrate nicely, but it can't do much past running a script that would take
care of everything (build-wise). Variables? Not really. Conditions? Not at
all. Final steps? Nope.

Documentation (at least of API) is not that great. If it is available since
atlassian's Confluence seems to be down most of the time. The API itself is
pretty weak as well. And weird too.. getting an HTML error response on json
request? Yay!

All in all, it's one of the worst tools I had to use in the recent years. It
looks like a dummy product, just for the sake of it. But at least it's fast I
guess. Or I don't get its purpose.

~~~
i386
I'd love to dig into those specific points with you. My email address is in
this thread.

------
lnanek2
Don't really understand why they are comparing Box and Atlassian the whole
article. Box is cloud storage. Atlassian is programming tools like issue
trackers, wikis, etc.. It's like comparing DropBox and StackOverflow. It
doesn't make much sense.

------
hyp0
oblig. BitBucket has free private repo's
[https://www.atlassian.com/software/bitbucket/overview](https://www.atlassian.com/software/bitbucket/overview)

 _you don 't get to 3 billion dollars without giving away a lot of stuff for
free to infiltrate the enterprise_

~~~
thathonkey
I use Github for personal stuff and Bitbucket at work. They're pretty
comparable. I don't really have a problem with either. Some parts of the
Bitbucket UI are nicer, some parts of the Github UI are nicer.

It's hard to beat free private repos but note that they are limited to 5
users. If you have a larger team, you've got to pay.

~~~
aeflash
Another key distinction of Bitbucket is that you pay per private collaborator,
rather than per private repo. You could have a 5 person team but 100 private
repos, and it would still be free. After that its $1 per user per month. With
Github, the 50-125 private repo tier costs $100 per month for an organization.

------
nodata
Sold for more than Nest. At last something that makes sense!

~~~
outside1234
Making more sense than Nest is a low bar.

------
allochthon
These multi-billion dollar valuations are uncomfortably close to the 3b needed
by VCs to get the carried interest commission, mentioned here [0].

[0] [http://modelviewculture.com/pieces/five-reasons-not-to-
raise...](http://modelviewculture.com/pieces/five-reasons-not-to-raise-
venture-capital)

------
ToastyMallows
I'm not surprised. We use Crucible at work and everyone loves it. Atlassian
makes some great prodcuts.

~~~
kodablah
It does have some warts but is the best out there. I believe the code review
market is very ripe for disruption (especially for software hosted publicly on
sites like github).

~~~
hoopism
I have similar sentiment. Use a lot of Atlassian tools over the years and I am
constantly bitching about various issues... eventually someone says "ok, find
something else that's better"... and I can't. Not for lack of trying... there
are lots of competitors... but they all are lacking.

------
rpowers
Good! I enjoy their tools and think they really deserve that.

------
EGreg
Anyone here think JetBrains is in the same space and can also fetch a huge
valuation?

Also don't forget, Atlassian runs BitBucket! And look at GitHub's valuation.

~~~
kmt
JetBrains, yes absolutely. YouTrack is not as popular as Jira but JetBrains'
IDEs are very popular. TeamCity is also waaay better than Atlassian Bamboo and
sells well in the enterprise.

------
stephengillie
We've had a rough, shaky time using Jira, but it's almost entirely due to
internal politics and constantly-shifting business priorities. (aka CEOs and
owners who are just megaphones for their corporate customers) We intended to
replace our invented-here ticketing system (which has Zendesk integration)
with Jira, but instead we integrated Jira into that invented-here ticket
system.

On the other side, my team has been bit by a bug from 2008 which prevents us
from changing any ticket's state to Resolved. We can Resolve tickets, but
their Resolution remains Unresolved. Since the Resolved state is central to
most of Jira's built-in features, this means Jira has been broken for me since
we installed it 6 months ago. The Your Issues default display shows all my
tickets, including my closed tickets. The interface is not customizable enough
to build workarounds for this problem.

Also, the name (bastardizing the Japanese pronunciation of Godzilla) always
feels somewhat racist to me.

~~~
sledmonkey
We had a similar bug that we worked around by adding a transition view of
"Resolved Issue Screen" to all steps leading to done in the Add Workflow
Transition page.

~~~
jeffsinclair
If you also want to fix existing issues, I'd suggest creating a "loopback"
workflow transition on the resolved state, and adding a post-function that
sets the resolution to "Fixed" or something similar.

You can then bulk transition all your existing issues and the resolution will
get populated correctly.

------
jmacd
I met Mike and Scott in 2004 and they were incredibly humble, focused and
benevolent then. From what I can tell they seem to have maintained that
through the years and all their success. They also had a President of their
company names Jeffery Walker, who was one of the kindest and most interesting
guys I've ever met.

This is a company that is learning too. Since the acquisition of HipChat they
have made the product dramatically better. If they can get a good model in
place for further acquisitions, and they can continue to successfully launch
their own products as well as they have in the last few years, then this
company is on track to being worth a hell of a lot more than $3.3bn.

------
sergiotapia
I love Atlassian products. I use it on every project I make, and recommend it
to clients when we need a place to keep workflow centralized.

We use:

JIRA - For issues Bitbucket - For code repository Confluence - For
documentation Bamboo - For a build server and CI

I'd love to settle on HipChat as well but it's stupidly difficult to get it to
pull git commits and other things directly into chat.

Flowdock is much much simpler in usage, UI and integration - so Atlassian
team, if you're reading this: Let me 1-click integrate git commit notification
into a HipChat room of my choosing, you own both products - make them connect
in the easiest most straightforward way!

~~~
eean
[http://help.hipchat.com/knowledgebase/articles/65271-bitbuck...](http://help.hipchat.com/knowledgebase/articles/65271-bitbucket-
integration)

:)

------
neovive
Congratulations to Atlassian. We've been using a locally-hosted Confluence
instance for over 3 years in a higher education setting and it's been a great
experience. The more I use Confluence, the more I see it's true value as a
collaboration platform. The uptake among users has been great and the sharing
of information has grown exponentially. The product consistently improves and
gets easier to use over time as opposed to typical enterprise applications.

------
nraynaud
What would be the exit for the VCs? they could have kept it private without
the VCs, but I don't think VCs line up for dividends at the end of the years.
That forces them to create an exit event for a company that seems in a nice
path.

~~~
jsonne
If you wanted to keep the company private and give the Vc's an exit you can
always do a leveraged buyout. Basically borrow loads of money from a bank and
use it buy back their equity.

~~~
nraynaud
doesn't that pit the management against the VC on pricing when doing a
management initiated LBO?

~~~
jsonne
Sure. It's not a perfect alternative, but it's an option. I imagine it would
be a happy negotiation. Basically just trying to figure out what multiple the
VC would want and negotiating a fair outcome.

------
mark_l_watson
Their git service is really first rate. I have always felt a little guilty
that I don't pay them for services rendered, so I would like to at least give
the Atlassian crew my best wishes.

------
veidelis
The company I work for uses both Confluence and Jira. We find those very
helpful, but the price of plugins for additional functionality is too high,
imho.

------
Lambdanaut
I personally don't see the value in their product, but they've got huge market
saturation so that valuation sounds about right.

------
startupranks
Now #11 on www.thestartup100.com

> 1/3 of the top 100 are SaaS, but not all are purely enterprise.

~~~
mcintyre1994
Assuming from your username that this is your site, sorry if that's wrong.
Anyway, how do you define a "startup"? Some of these companies are over a
decade old (eg Atlassian), some have over a $B of funding (eg Dropbox), and a
couple (Box, GoPro) seem to be pretty much at IPO. Also they're all in
America, is that intentional or could you genuinely not find any non-US
startup valued at over $225M?

~~~
startupranks
The list is pre-IPO / private tech companies. There are several non US
companies on the list - e.g., Spotify, Atlassian. Also, note that you can sign
up to add or edit companies. It's a collaborative list and dynamic. Thanks for
the feedback.

------
thrillgore
I can sorta see the value in Atlassian, with Jira being used what seems
everywhere.

~~~
LandoCalrissian
I agree, this actually seems pretty reasonable.

------
Elof
That's only 3.3 Instagram's, one Snapchat, or .21 WhatsApp's. Solid proof
consumer tech is always more profitable then enterprise tech.

~~~
Guvante
It is hard to compare companies that are bought out, since they are valued
higher due to the network affects with their new parent company.

i.e. if Instagram had a valuation of $800 million the $1 billion purchase
price could make sense if Facebook believes their combination could produce
the difference in price.

~~~
dredmorbius
It's not just network effects. Purchase of Snapchat at $21 billion, or Bebo at
$870 million, had a lot to do with attempted strategic positioning and/or
edging out competitors who were eyeing acquisition. Doesn't always mean the
acq will perform to price.

~~~
Guvante
But those are network effects. If I buy a product and kill it and make more
money than if I had not purchased, then it was good acquisition.

