Slack buys HipChat – Bloomberg

Atlassian Corp. sells its corporate chat software to compete with Slack Technologies Inc. and take a small stake in the start-up because they face greater competition from Microsoft Corp.

Slack will pay a secret over the next three years to acquire HipChat and Stride products from Atlassian, said the leaders of both companies. Slack CEO, Stewart Butterfield, described the payment and investment by Atlassian in his company as "nominal" in financial terms but strategically important. He refused to elaborate on the first.

The deal gives Slack more customers, most of whom pay a monthly service fee, and allows Atlassian to leave a company that has failed to generate as many requests as expected. The combination of both activities strengthens Slack at a time when Microsoft is pushing a competing product called Teams to some 135 million Office cloud customers. Microsoft has launched a free version of Teams this month in an effort to attract people who are not subscribers to Office 365.

Taking a competitor is good for Slack, said Butterfield: " There is less choice for people. "

The agreement allows each company to focus on the area where they lead – Slack in the salons Discussion and Altassian in Project Management Software. Both companies already share a lot of customers. Hundreds of thousands of groups using Atlassian products like Jira and Trello have Slack accounts, said Atlassian co-CEO Mike Cannon-Brookes. These include Capital One and NASA's Jet Propulsion Laboratory.

Atlassian, who is expected to present the deal in a quarterly earnings report, said the impact of revenue losses would be largely offset by Slack's payments over the next three years. Although HipChat preceded Slack, the younger company quickly added more features and attracted more users. "Hipchat and Stride are not going as well as some other Atlassian products," said Wayne Kurtzman, an analyst at IDC. The Atlassian action jumped 18% in trading after the news

Atlassian made a last effort less than a year ago to follow Slack and Microsoft in software of cat. In September, he tried to move HipChat customers to a new product that combines more features than Slack and Microsoft have added to their chat services. Called Stride, the application offers audio and video conferences and project tracking. When there were not enough users, Atlassian had the idea of ​​a sale. "We are very proud of what the team has built," said Cannon-Brookes. "Two months ago, Atlassian President Jay Simons met Butterfield for breakfast and asked him if he wanted to acquire the cat business," said Mr. Butterfield. two companies had worked together in the past on software projects and shared congratulatory bakery products to celebrate product releases, said Cannon-Brookes. "The agreement marks the first time that Atlassian makes a strategic investment in another company, he said.

Atlassian will continue to manage chat products and customers until cloud services are closed in February. with HipChat installed on their own servers will be able to use it for a few extra months or up to two years, depending on the version.

Slack and Atlassian will facilitate moving customers, but they will not be forced to change, said Butterfield. He expects, however, that most of them will change, adding "unique numbers" as a percentage of market share to Slack. Butterfield and Atlassian refused to say how many people use HipChat and Stride. Microsoft claims that 200,000 organizations use teams. Slack said that there are 500,000, totaling 8 million people who use the service every day. Three million of these accounts are paid

( Updates of Atlassian shares in the sixth paragraph. )