Atlassian’s end-of-support deadline for its server products is fast approaching, on February 15, 2024. With less than five months to go, the company is confident that it has made the right decision to move to a cloud-first model, but it has also warned investors that the move could have a negative impact on revenue in the short term.
Atlassian’s server products were once its bread and butter, but the company realized early on that SaaS was the future of enterprise software. In 2016, Atlassian split the code base for its SaaS and server products, but it continued to keep the server products alive for customers who needed them.
By 2020, Atlassian was ready to go all-in on SaaS. The company believes that this will provide a better experience for customers and allow it to focus on innovation. However, it also knows that not all customers are ready to make the switch to the cloud.
Atlassian is offering datacenter licenses for its server products to customers who need an on-prem option. However, the pricing for these licenses is based on the number of seats, regardless of how many people actually use the software. This has led to some complaints from customers who feel like they are being forced to pay for more seats than they need.
Another concern for some customers is that Atlassian’s development plans are now very much cloud first. This means that new features and enhancements are being developed for the cloud products first, and then ported back to the datacenter products, if at all. This has led to some concerns that the datacenter products will become increasingly outdated over time.
The co-CEOs admitted “some portion of our Server customers will not migrate in FY24.” Or perhaps they’ll just quit Atlassian altogether.
Deatsch declined to share the number of server users yet to migrate, but said Atlassian is certain its decision to go cloud-first was correct.
The sources for this piece include an article in TheRegister.