War for the future of work at stake as Slack buys HipChat from Atlassian

27 Jul 2018

Team workers collaborate. Image: GaudiLab/Shutterstock

Slack is doubling down on its leadership as the work tool of choice for young workers.

Slack and Atlassian are joining forces in the battle for dominance of today’s mostly millennial and Gen Z digital workforce.

Atlassian is selling its corporate chat software HipChat and Stride to its rival, Slack, and will take a small equity stake in the latter.

‘This partnership is about a joint vision of simplifying and automating the huge amount of effort that teams everywhere expend to stay aligned, coordinated and productive’

Ostensibly, this will ensure both companies will be in a good position to defend against competition from software giant Microsoft, which is muscling in on the market for real-time chat and collaboration with Teams, a platform it is rolling out to 135m Office cloud customers.

Under the terms of the deal, Slack will pay an undisclosed sum over the next three years to acquire Atlassian’s HipChat and Stride assets.

The win-win is that Slack adds more paid customers while Atlassian can focus on its core Jira platform. Last year, Atlassian acquired Trello for $425m.

“We have always had a spirited yet friendly competition with Slack, and have even sent each other congratulatory cookies and cake,” said Atlassian’s vice-president of product, Joff Redfern.

“Across our product portfolio, we have long shared many integrations, which hundreds of thousands of teams use every day. Through this new partnership, both companies will lean into building better integrations together and more sharply define the modern workplace experience for companies everywhere. We’ll deepen existing integrations between Slack and Jira Cloud, Bitbucket Cloud and Trello, and create new integrations with other products.

“We’ll showcase the first set of these integrations at our user conference, Atlassian Summit, in Barcelona, 3 to 5 September 2018.

“As part of this partnership, Atlassian has made an equity investment in Slack, and Slack has acquired the IP for Stride and HipChat Cloud, both of which we will discontinue. We will also be discontinuing HipChat Server and Hipchat Data Center and working with Slack to provide a migration path for customers of all four products. Slack has been a user of Atlassian products for many years, and Atlassian’s 2,600-plus employees will begin using Slack,” Redfern said. “We’re committed to making this same move as easy as possible for our customers.”

Slack is not all hipster talk

Slack’s April Underwood said both companies are focused on the future of platforms that centre on how teams work.

“What’s fuelled this camaraderie is that we both share an orientation toward customer service. As the world transitions to best-of-breed software to run their businesses, it’s up to us to help make sure it all works as well as possible for our mutual customers.

“Today, Slack and Atlassian are taking even bigger steps to drive fundamental improvements to the experiences of hundreds of thousands of teams and millions of people around the world who use our products together every day.

“This partnership is about a joint vision of simplifying and automating the huge amount of effort that teams everywhere expend to stay aligned, coordinated and productive.”

Slack was founded by Stewart Butterfield, Cal Henderson, Serguei Mourachov and Eric Costello in 2012 amid the embers of a failed video games company called Glitch, a platform for colleagues to collaborate.

Slack is now the collaboration tool of our age.

According to Slack’s latest figures, there are now more than 8m daily active users across more than 500,000 organisations that use the platform. The company has more than 3m paid users and 65pc of companies in the Fortune 100 are paid Slack users. More than 70,000 paid teams with thousands of active users connect in Slack channels across departments, borders and oceans.

Slack recently introduced a new Actions capability that allows users to add tasks from other apps within messages. It has partnered with companies behind popular integrations on the platform, including Jira, Bitbucket, Asana, Zendesk and HubSpot.

Updated, 9.30am, 27 July 2018: This article was updated to clarify that Atlassian acquired Trello for $425m, not $245m, and to include Serguei Mourachov as co-founder of Slack.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years