Atlassian is a leading provider of work productivity software. The company’s main products are Jira, Jira Core, Confluence, Trello, Jira Service Desk, Opsgenie and Bitbucket. Atlassian was one of the first companies to benefit from the shift to agile software development (continuous development through short feedback loops) vs. the waterfall methodology (linear sequences of development). As other teams like HR, operations and marketing move towards an agile work environment, there are Atlassian products for each type of team.
The most telling chart in this whole article, for me, was the Large Customer Growth charts.
What, if any, are the implications of this? At first I thought that it will increase their operating leverage, but unless this cohort is more retentive, or they're able to cross/up-sell more to it, it should stay the same.
In the first order, I think it means that the rate of revenue increase will go up, what do you think are the second order effects of $TEAM trying to capture more of the up-market/big-ticket segment?
Great question. I don't have any unique insights on this, but I would say that enterprise customers tend to have lower churn (lower risk of going out of business, higher integration costs, slower decision making, etc.), so the LTV goes up. Furthermore, the on-prem to SaaS transition for enterprise customers should move the needle the most for Atlassian. But I don't know how margins will be impacted either way. It depends on the efficiency of the enterprise sales process vs. selling to an SMB customer over the internet.
Hi YHB, great article, thanks!
The most telling chart in this whole article, for me, was the Large Customer Growth charts.
What, if any, are the implications of this? At first I thought that it will increase their operating leverage, but unless this cohort is more retentive, or they're able to cross/up-sell more to it, it should stay the same.
In the first order, I think it means that the rate of revenue increase will go up, what do you think are the second order effects of $TEAM trying to capture more of the up-market/big-ticket segment?
Great question. I don't have any unique insights on this, but I would say that enterprise customers tend to have lower churn (lower risk of going out of business, higher integration costs, slower decision making, etc.), so the LTV goes up. Furthermore, the on-prem to SaaS transition for enterprise customers should move the needle the most for Atlassian. But I don't know how margins will be impacted either way. It depends on the efficiency of the enterprise sales process vs. selling to an SMB customer over the internet.