Enterprise software development has changed a lot over the last two decades, from expensive server farms to the explosion of web and mobile applications to the rise of the cloud. Yet surprisingly, a lot of developers are still using the same basic tools to manage the complicated process of building and delivering software, and Atlassian is one of the mainstays.
Atlassian's Jira bug-tracking tool and its Confluence project management tool were launched when the iPhone was only a twinkle in Steve Jobs' eye, and both are still widely used inside corporate software development operations. And the company is still growing: its stock shot up 42% last year thanks to a 37% jump in revenue over 2019.
This is the paragraph where I am obligated to acknowledge that the world has changed in the last month. Atlassian was scheduled to host its biggest customer event of the year this week in Las Vegas, and obviously that didn't happen, although the company did produce an online event.
But co-founder and co-CEO Scott Farquhar said that like a lot of enterprise software companies, Atlassian is seeing an increase in demand for its products now that software teams can't "turn to their co-worker sitting next to them to get information," as he put it in an interview with Protocol this week from Atlassian headquarters in Sydney. This crisis has also exacerbated the need for companies that have put off modernizing their tech infrastructure and workflows to get with the program, as online channels become literally the only way companies can interact with their customers, he said.
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Farquhar discussed the love/hate relationship that a lot of developers have with Jira, the ongoing evolution of enterprise software, and why there's still so much runway ahead for businesses helping companies upgrade their tech.
This interview has been condensed and edited for clarity.
It's pretty clear to me that Jira is widely used in the engineering community for a variety of things. It's also pretty clear to me that people have a bit of a strange relationship with Jira. Different people have different experiences, of course, but a lot of the people I talk to find Jira frustrating.
Love for Jira varies widely, often depending on how well it has been set up by an organization. And we know that the organizations that [require] 400 fields for an engineer to get something done, no product is going to be loved in that situation.
But we're also continuing to invest in improving Jira's interface, its speed, performance, usability. We launched the next-generation Jira, which is a rewrite from scratch of Jira and how it interfaces with the customer or the end user. And that's been extremely well received, the [customer satisfaction] numbers for that are much higher. As you'd expect from a product that's been around for over a decade, we're continually investing in improving it and particularly its user interface.
One thing we launched recently is automations for Jira. If you think about developers and what they want to do, they want to do things less, they want to script stuff. They want to make sure that they're spending less time in a user interface and more time writing code. And automation for Jira allows them to get out of the product and script the types of things that they want to get done.
Atlassian is interesting not just because of Jira, but because you have several collaboration products under your wing. Going back a long time, businesses bought all their software from one company, maybe 10 years ago. With the rise of SaaS, they started to roll in all these different products from different vendors. And as you know, that's really the trend that has dominated the last, I don't know, 10 years.
It seems like there might be a shift underway back toward a little bit more centralization. I hear from a lot of people who are just, like, sick of dealing with that many vendors, the complexity of the billing can get a little crazy. How do you see all of this playing out the moment, and how is that informing the way you think about moving forward?
So if you look at what Atlassian has done well, over I guess our entire existence, we help unify teamwork. And what we're going to do is unify more types of teamwork for more types of teams.
Jira, for example; people don't really work in Jira. They work in all sorts of applications, as developers, they do work in their IDE and write code. If you're a designer, you're in Photoshop, or InVision or Figma, or one of those tools. If you're a product manager, you're writing specs largely in Confluence.
When companies talk about best of breed versus a single suite, I think what we've found is that companies are after effectively a unified backbone or a control plane that runs across all their products. What we do really well is to be that backbone of how work travels around your organization.
So I think that, "best of breed versus a suite" is perhaps the wrong way to think about it. If you said, I'm just going to do a suite, the problem with that is, over time, the individual products degrade because you're really taking the lowest common denominator. And if you take only the best to breed, you end up trying to integrate all these products individually, which is just a huge overhead for your organization.
So what we've tried to do is effectively be the control plane, a common platform that connects all parts of your organization together.
What has been inspiring some of these newer products and newer themes that you're focusing on? As you sort of look out over the rest of the year, if you had to pick two or three main things that you said to yourself at some point last year, "Look, we've got to make sure we nail this as we move forward into the next couple of years."
As trite as it might sound, digital transformation is still what CEOs are talking to us about. There was a McKinsey survey recently that said only 16% of respondents believe their organizational digital transformations are successfully improving performance. These companies are still at the very beginning of making their entire world digital.
There's only three types of companies, right? Companies that are technology companies, companies becoming technology companies, and companies that are being disrupted by technology companies. And so every company in the world needs to go through this digital transformation to make sure that they can produce goods and services in a digital way.
Obviously, this is even more important when people aren't turning up to your retail stores, and they're buying online, when people need to work from home in new ways. COVID-19 is changing the way that this all happens, when you need visibility into your organization.
In Australia, there's a bank called ANZ and they have 10,000 people who are in the digital transformation team, and they've broken it into 1,000 teams of 10. And they've got to coordinate that work amongst those 1,000 teams and make sure they're working on the company's biggest priorities. That's what people are using our products for.
If you're a company that hasn't gone through this digital transformation process, what are you doing right now when it comes to some of these things that we're talking about?
It's interesting because I think the world you and I orbit, you think, "Hang on, is there anything left to be done in the space?" Like, we've been talking about this for a while, and it's just not the case that everyone's there.
There are many companies, including many of our customers, who would still be deploying and producing software every six or 12 months. There are banks in Australia where releasing software is still something where they all get together once a quarter, they turn up on Saturday, you know, they're trying to release the software, and they do all their smoke tests, and integration testing, and if all worked, they go home, and if it didn't work, they spend their Sunday rolling it back.
Some banks these days are producing and pushing code to their point-of-sale terminals 10 times a day, and they have no downtime. And so there's a big gulf between that company that can produce and deliver software to the terminals 10 times a day, and the company that produces once a quarter, in terms of how fast they can react to customer feedback and how fast they can adapt to the changing world.
How is Atlassian dealing with this particular moment in time?
Globally, what we're seeing is that companies around the world are getting a crash course in how to work remotely and how to work digitally, overnight. And so that's interesting to see.
We've seen more traffic to our products that people are using as a result of people not being in the office and having to use the collaboration tools that they're either having to invest in for the first time or [the tools they] have invested in that are using [them] more, as a result of not being able to turn to their co-worker sitting next to them to get information, they sort of have to turn to digital tools. And we're also seeing this not only at small companies, but the very largest of companies.
