You can't invest in Atlassian yet but at least -- unlike the first time I wrote about the small Austrailian company -- I am taking the time to make sure I spell its name right. Sixty million in first-round funding will do that and Accell Partners put $60 million into the 8-year-old enterprise software tool maker this week.
Depending on what "minor equity position" means, Accell might be valuing Atlassian at over one billion dollars. I think Accell was one of the first to value one of those social networking sites my kids waste their time on so highly a few years ago. In fact, Atlassian is sort of a social networking tool for developers that in turn uses enterprise-based social networking (what we used to call collaboration) to run its business.
So it's worth a quick look to see if anything important changed at Atlassian -- other than obvious great growth (but metric unkown; VCs don't seem to use revenue any more) -- since the above referenced blog post from two years ago. The issues then were as follows:
- Atlassian was open but not an open source company.
- Atlassian was independent but a strong Microsoft (MSFT) partner.
- Atlassian was apparently following a new enterprise software business model (but it looked to me like an almost complete "back to the future").
"(Does Atlassain) add a (new) type of revenue flow from (IT users) to suppliers to my (revenue flow market) model? So far I think not, because what Atlassian appears to do is no different than other independent software vendors (ISVs) in terms of perpetual right to use (RTU) licenses for a fee -- except that it will release the source code the way IBM and the seven dwarfs always did before ISVs took over the market in the 1980s. Even today, Oracle posts pricing on its Web site (although it certainly gives discounts just like any other business). IBM of course participates very actively in the open source world. Through their users groups, SAP and all the other leaders actively let customers "raise feature requests and see what bugs have been reported online."
So if Atlassian stayed on that course (and I see no indication on its web site that it did not), the company is a good advertisement for the old fashioned way of succeeding in the software business: selling it.
This seems to fly in the face of the problems Borland and others had trying to sell software-development tools in the face of IBM, Oracle (ORCL) and other enterprise software market leaders giving it away. But Atlassian does so with sales and marketing updated to the Internet era and now seems to partner with Google (GOOG) as well as Microsoft.
Note to Atlassian folks: Sorry if I mispelled your name anywhere above.
-- Dennis Byron
(no financial interest in the companies mentioned except for the $12 a year I pay Microsoft for Office)