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Atlassian cloud sweetens licensing deal for enterprises

An Atlassian Cloud Enterprise licensing update furthers its appeal to customers contemplating a move to SaaS to offload and streamline IT ops.

In the same week that Atlassian ceased offering one version of its on-premises software products, the DevOps vendor expanded the enticements meant to lure large customers into its cloud.

As announced in October 2020, Atlassian's sales of Server editions of Jira issue tracking, Confluence collaboration and Bitbucket CI/CD software, among others, came to an end as of this month. Server edition customers could choose to remain on premises with Data Center editions of those tools, but Atlassian has also hiked prices for those products; the company has been clear that its future focus will be on cloud services.

That was the stick Atlassian used to drive users toward its cloud -- and this week, it officially added the carrot, making an Enterprise edition of its cloud, first previewed in April 2020, generally available. With that general availability, the vendor has revealed a further licensing incentive to attract cloud converts: Cloud Enterprise users can set up multiple instances of Jira, Confluence and Jira Service Management for individual teams without having to pay for separate licenses. At the same time, users can retain a centralized configuration workflow for certain management tasks, such as security configuration or assigning data to geographic regions for compliance.

Tyler Technologies, a government information systems software maker in Plano, Texas, already planned to move to Atlassian cloud before its next software license renewal in mid-2021. This new aspect of Cloud Enterprise has elevated its IT managers' confidence in that decision.

Jeff Green, Tyler Technologies Jeff Green

"There are a few challenges that we have with maintaining a single instance of Jira for all the different autonomous product teams," said Jeff Green, CTO at Tyler Technologies. "There may be a particular add-in or marketplace [integration] that is only relevant to one part of our company, but the way their current licensing works, you effectively have to license it for the entire organization."

Under Cloud Enterprise, administrators may assign users to an unlimited number of instances that individual teams can customize. Cloud Enterprise licenses also bundle in Atlassian's Access identity and access management software, which is separately licensed for other cloud tiers.

"It was always weird to me that they priced that as a separate thing just so you can get SAML and things other enterprise products bundle into their subscription," Green said.

The Cloud Enterprise license for Jira Software Cloud, Confluence and Jira Service Management also comes with a 99.95% uptime service-level agreement (SLA), data residency controls and support for enterprise licensing agreements (ELAs) that encompass both on-premises and cloud services.

Jira Software Cloud Enterprise pricing starts at $122,250 for 801 to 1,000 users. Confluence Cloud Enterprise pricing for 800 to 1,001 users is listed at $92,625. Jira Service Management Cloud Enterprise starts at $99,750 for 201 to 300 users. Atlassian doesn't yet offer ELAs for Cloud Enterprise without an on-premises component but will consider it in the future, company officials said this week.

Atlassian Cloud Enterprise add-ons still in development

Atlassian cloud has evolved quickly since the company moved its SaaS services away from a self-managed back end that had well-known reliability issues and onto an AWS microservices architecture in 2018. Atlassian introduced its first enterprise security features for cloud in 2019 with the addition of encryption and its first 99.9% uptime SLA for its premium edition.

However, Atlassian execs acknowledge that some aspects of feature parity with enterprise on-premises products remain under development. For example, Cloud Enterprise users can pin data to the U.S. or European Union for compliance purposes but not yet to specific countries, though Atlassian cloud will eventually support data residency in Australia, Canada, the U.K., Japan and others, according to a company blog post. Atlassian Cloud Enterprise certifications for specific compliance frameworks such as HIPAA and FedRAMP are also in the works.

The SLAs Atlassian's offering with this are higher than we'd be able to meet internally without spending a ton more money.
Jeff GreenCTO, Tyler Technologies

Some third-party add-ons enterprises use on premises don't yet have cloud equivalents, but Atlassian launched a Forge program last year to hasten cloud add-on development. That program will graduate from beta to general availability in about a month, company officials said.

"With the recent announcement of end of life for Server, we are making it very clear to partners that we are cloud-first," said Bala Venkatrao, head of enterprise cloud product at Atlassian. "We are building incentives and support for the ecosystem to prioritize cloud-equivalent apps and engaging with large enterprises to do an inventory of the apps they have in the data center that they need in the cloud."

For Tyler Technologies' Green, add-ons won't be a hindrance to Atlassian cloud migration, and any disruption that may be caused by the move is outweighed by the potential benefits.

"The SLAs Atlassian's offering with this are higher than we'd be able to meet internally without spending a ton more money," he said. "It also gives us the option to upgrade [between software versions] more frequently in a way that's less painful."

In general, analysts said Atlassian has staked out a strong competitive position with its cloud products.

Charles Betz, Forrester Research Charles Betz

"A customer can start with a Trello board as a two-person startup and grow all the way into Atlassian Cloud Enterprise," said Charles Betz, an analyst at Forrester Research. "No other company out there has as complete a tool set for both the source code and release side, and the ops side [of the DevOps toolchain]."

However, detailed application and infrastructure performance monitoring is one gap in the Atlassian portfolio the company may look to fill this year through acquisition, Betz added.

"If Atlassian can figure out a way to make pricing for observability integrated [with other products] and smooth out the lumpiness in pricing for those tools, from a business perspective that might make sense," he said.

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