The riddle that is Atlassian

If you work for an open-source company, no doubt you use some of Atlassian's software (Jira, Confluence, FishEye, etc.). If you're like me, you've always assumed that this was because Jira/etc. is open source. In this, I'm sorry to tell you, you would be as mistaken as I've been.

Atlassian is one of the most fascinating companies with which I'm familiar. Oddly enough, the company succeeds because it makes great software. It does, even more oddly, what most open-source companies aim to do. And yet it is not an open-source vendor.

There's a lesson in this for me...and maybe for you. I talked with Mike Cannon-Brookes today, Atlassian's co-founder and CEO, and learned the following:

First, the essentials:

• Atlassian did $20.7 million in its last fiscal year (which runs from June to June);
• It has grown at a torrid pace;
• Atlassian has been profitable from its first day of operations, and has taken $0.00 in outside venture capital;
• The company employs ~100 people, 50% of which are in Engineering, and another ~25% of which are in Technical Support;
• It has customers in 92 countries (including Angola!);
• Atlassian offers its software under a visible source license: customers can view and modify the source, but can't redistribute it; and
• The company makes no pretenses at being an "open-source company," but heavily contributes to a wide range of open-source projects and hires extensively from the open-source development community.

I asked Mike about how it sells its product:

Support is sales for us. The traditional salesperson doesn't exist in our company. We don't have any salespeople that will call you and try to get you to buy, or give you pricing. Our pricing is online.

When someone needs assistance, we have 20-30 people spread between Australia, Malaysia, and the US (San Francisco) to support them. Our Technical Support organization is hugely important for us.

And about the company's relationship to the open-source community:

Our software isn't open source, but the company is very open source oriented. We have committers on Apache, JBoss, Codehaus, Spring, and other projects. In fact, we tend not to use any open-source code without having a committer on or strong involvement with the project.

Most non-core components of Atlassian's products (like plug-ins) are open source. But we make no pretenses of being an open-source company. In my mind, there are three generations of companies: 100% proprietary, then the second wave which are 100% open source, and now we're in the third wave where it's a mix. So, on one side we use a lot of open-source components which is one reason our costs are so much lower, but on the other we compete with open-source competitors like, say, Bugzilla, and we have to show that we're actually superior.

Our proprietary competition is 10-30 times more expensive than Atlassian's products. Open-source competitors are cheaper than us (free). Our value is to sell a better product than anything else you can get for our low price, or that you can get for free.

We give customers the source code and allow them to modify and configure, but not distribute, the code.

That said, Atlassian isn't afraid of having its source available. You can get it all over the place. We don't worry much about it. We're pragmatic. There aren't many big, innovative secrets in our code. There's nothing in the code that you can really steal. We just do things better. And because customers are going to see our code, we have the same quality barriers that a good open-source project would have. We write great code because we know it's public code.

One of the benefits of open source is in distribution, so I asked Mike, "How did you manage to get so widely distributed?

Free online evaluations, free 30-day trials with liberal extension policies. Also, any open-source project can use Atlassian's software for free. Most open-source projects are pragmatic and recognize the value that Atlassian brings to the open-source community, plus it's a good product. So we have a large following in the open-source world.

This, in turn, helps us. The biggest benefit we get from open source is engineers. We have 45 engineers in the company, and they are among the best on the planet. We have a very high bar to join the engineering team. The best way to find that talent is through our work with the open-source community. Open-source developers work with our stuff and then when they need a job they come back to us.

I asked, in closing, for the secret of Atlassian's success. Mike didn't hesitate:

Build really good things. That's the secret.

Indeed. It certainly seems to be working for Atlassian.