Atlassian won’t push on cloud migrations in “savvy” move for the enterprise market

Atlassian has switched up its cloud-first approach to favor enterprise customers in what experts have told ITPro is a “savvy” move for the Australian software company.

In a letter addressed to its shareholders for Q4 2024, the firm outlined its altered focus. Where it was initially focused on its smaller customers, it is now shifting focus towards its larger ones.

While Atlassian has made customer cloud migrations a “top company priority” over the last few years, this mission mainly “comprised of smaller customers who could make the switch to cloud in a day.”

The firm’s other customer base includes much larger enterprises with “more complex” environments that, as such, require a different sort of attention from the company.

“Many of these enterprise customers will move to Cloud over a multi-year period, and an increasing number will adopt a hybrid approach of both Data Center and Cloud as they shift their teams and users over time,” the firm stated.

Shifting its focus to these customers, Atlassian said it’s now adopting an “enterprise first” mindset as opposed to a “cloud first” approach.

According to Mark Flynn, cloud expert at IT specialist firm Computer Care, this is a “smart move” by Atlassian and one that displays a “savvy understanding of the enterprise market.”

“While this move might cause some short-term ripples in their share price, it's likely to pay dividends in the long run by fostering loyalty and enhancing Atlassian's reputation among their most valuable clients,” Flynn told ITPro .

Cloud migrations are more complex than “simply flipping a switch”

Atlassian’s move speaks to common issues in enterprises. These are businesses that often have sprawling legacy IT environments unfit for speedy migrations or quick turnarounds on big digital transformation projects.

"The reality is that enterprise-scale migrations are far more complex than simply flipping a switch. These organizations often grapple with deeply entrenched legacy systems, intricate security requirements, and stringent compliance regulations that can't be rushed or overlooked,” Flynn said.

Data security, for example, can’t be “addressed overnight” - enterprises need ample time to assess risk, secure budgets, and allocate the correct resources to ensure a “smooth transition.”

All of these steps need to be done properly as well. With many IT leaders repeatedly feeling rushed into the cloud , it’s vital that enterprises take their time with cloud migrations and carry them out effectively.

Improve productivity, enable flexibility, and foster innovation

While a “one-size-fits-all” approach may have more success for smaller companies, Flynn added, it’s a technique that can have less success for larger companies, considering the scope of infrastructural, security, and compliance concerns that need to be addressed.

Through an acknowledgment of these challenges, Flynn added, Atlassian is posing itself as “a true partner rather than just another vendor.” It’s a move set to not only retain the firm’s largest customers but also to make Atlassian a “vendor of choice for other enterprises considering similar transitions.”

"In the world of enterprise software, listening to your clients and adapting to their needs is crucial. Atlassian's move shows they're doing just that, which will likely strengthen their market position and drive sustainable growth in the long term," he said.