News Stay informed about the latest enterprise technology news and product updates.

Atlassian-Slack deal marks end of HipChat, Stride

Slack, which is facing more aggressive competition from Microsoft, bought Atlassian HipChat and Stride. The Atlassian-Slack deal marks the start of a strategic partnership.

Atlassian has sold HipChat and Stride to Slack Technologies, exiting the business chat market as Microsoft increases...

the competitive pressure with its Teams collaboration software.

As part of the deal, which was announced this week, Atlassian agreed to make "a small, but symbolically important investment" in Slack, the latter company said in a blog post. The companies did not release details of the investment or the purchase price.

Atlassian sold the products less than a year after it launched Stride to compete with Microsoft and Slack in the team messaging and communications market. Stride had all of the chat features of HipChat, plus file sharing and video and audio calling.

Despite being a "very good" product, Stride did not attract many customers, said Alan Lepofsky, an analyst at Constellation Research, based in Cupertino, Calif. "I think it was just not a business that Atlassian wanted to be in."

Instead, the Atlassian-Slack deal shows Atlassian is more focused on the project management market, with products that include Trello, Jira Cloud and Bitbucket Cloud, Lepofsky said.

Atlassian had integrated the three products with Slack long before announcing the latest deal. In fact, the two companies have been friendly competitors for some time, sending each other cookies and cake when reaching milestones.

Microsoft aggressively markets Teams

Nevertheless, how helpful the strategic partnership with Atlassian will be to Slack in battling the much larger Microsoft remains to be seen. Microsoft is aggressively marketing its Teams software to its 135 million Office 365 customers, while providing others with access to a free version of the cloud-based software.

I think it was just not a business that Atlassian wanted to be in.
Alan Lepofskyanalyst, Constellation Research

Atlassian and Slack plan to work together in making both companies more competitive. Today, hundreds of thousands of business teams use Atlassian products from within Slack, the companies said. In the future, the vendors plan to deepen those integrations and work together in adding other Atlassian products.

Today, Slack and Atlassian team messaging are often found within IT and application development departments, so Slack is in a strong position to consolidate those communities under its brand and to hold on to those customers, said Irwin Lazar, an analyst at Nemertes Research, based in Mokena, Ill. "Replacing a team collaboration app that's tightly integrated with app dev tools and workflows is a difficult sell in many of the companies we study."

Slack, however, could run into trouble if it follows through with plans to move Atlassian customers on the on-premises version of HipChat to the cloud, Lazar said. "If Slack ends support for on-premises HipChat, and those customers still aren't willing to go to the cloud, then they are likely to turn to a vendor like Mattermost that supports on-premises and private cloud deployments."

Also, Slack will still face "a tough battle against Cisco [Webex Teams] and Microsoft for the broad enterprise user base," Lazar said. "But our research is showing that organizations are open to supporting multiple team collaboration apps if those apps provide value."

Indeed, the team messaging and collaboration market remains wide open. Microsoft as a pure-play provider trails Slack, with 200,000 organizations using Teams versus 500,000 for Slack. The latter company said it has 3 million people paying to use the service every day, plus 5 million users of its free version. Atlassian won't disclose the number of people using HipChat and Stride.

Slack has launched a website instructing HipChat users on how to switch to Slack and take their data with them. The migration tools for Stride are "coming soon," Slack said.

Dig Deeper on Collaborative Applications

Join the conversation

1 comment

Send me notifications when other members comment.

Please create a username to comment.

Why did you choose Slack or Microsoft Teams?
Cancel

-ADS BY GOOGLE

SearchCRM

SearchNetworking

SearchSDN

SearchTelecom

SearchITChannel

Close