I met Mike Cannon-Brookes at the Office 2.0 Enterprise Irregulars’ (EIs) dinner for the first time (Atlassian sponsored the dinner for the EIs). Joe Kraus (CEO, Jotspot) encouraged me to talk to him; Kraus said he had a great company, and I should meet him. I talked to Cannon-Brookes briefly that night, but took the initiative to follow up with him the next day.
I ambled over to the Atlassian station, and first started talking to Anthony Rethans, a biz dev guy responsible for OEM relationships. Rethans started telling me general info about the company. He said that the company had over 4500 customers and that about 2000 of those were Confluence customers (Atlassian’s Enterprise Wiki) and the remainder were Jira customers. Jira was Atlassian’s first product– bug-tracking software. He said half of the Fortune 100 were using an Atlassian product. That got my attention.
As I was talking to Rethans, Cannon-Brookes came by. I asked him to show me the product, and I kept asking questions. Cannon-Brookes started showing me Confluence, but the more questions I asked, the more I was more interested in the success of the business than the product itself.
Cannon-Brookes told me the firm has well over a hundred thousand users on the product, and they’re prepping to announce a “scalable” solution (Confluence Massive) that will boost the company’s capacity to handle large accounts. Even today, he said, “IBM has over 15,000 users on the product.”
The facts, according to Atlassian, on the company’s stellar growth are the following:
- At 22 years old, Mike Cannon-Brookes and Scott Farquhar, his college mate from University of New South Wales (Sydney) started the company with a credit-card investment. To date, the company has taken in no outside investment and all growth is wholly organic. Estimates on the company’s revenues after four years in business are $15 million.
- From the beginning, the company experienced over 40% growth every quarter, until the past year or so, but it’s still barrelling along at about 20% per quarter in keeping with its size.
- Although the company spends some money on marketing, i.e., online marketing and a modest event-marketing program, the company’s success has mostly been word-of-mouth.
- The company has no debt.
- The company asserts that, “We sell a LOT of software. Licenses, one at a time,” according to Cannon-Brookes. An estimated 98% of the company’s revenue comes from software, not service contracts.
- The split between Atlassian’s two products, Confluence and Jira is roughly 40/60, with Confluence growing faster.
- The company employs 65 employees (the majority are software engineers)– 50 in Sydney, 12 in San Francisco, and 6 in Malasia.
- Atlassian releases 4 major releases every year, and about a dozen minor ones.
- There are over 200 plug-ins for the product which are shared at the discretion of the customer to the Atlassian community.
- Atlassian’s pricing can be found on its web site. Although the product is not open source, customers receive the source code with the purchase of a license.
Why do I love this company? They’re the first real example of an Enterprise 2.0 company succeeding in every way– financially (profitable, with no backing); widespread user adoption; a simple, but effective business model; steady growth, and a unique corporate culture to boot. In addition, they’re NOT from Silicon Valley, they’re Australian.
As a matter of fact, some of the typical analyst-type questions I was firing at the management was received with a shrug. In essence, they didn’t care what the answer was, or they really didn’t know. I loved that! They weren’t rude or pretentious; they shrugged those questions off– because they could. The biggest obstacle Cannon-Brookes said he was facing currently was managing the growth of the business.
The rap on Atlassian surrounds the issue of whether or not they’re candid about their revenues and customers, whether they’re truly Enterprise 2.0 (as their solutions are not on-demand, but rather the old school model of download, install, and maintain), and that they have a network of relationships with resellers and systems integrators for service.
I did my own fact-checking, and I have not changed my mind. I think this company has tremendous potential and should be an inspiration to every vendor participating in the next wave of Enterprise software.
This year’s ITSinsider e2.0, “Rock Stars of the year” goes to the boys from Atlassian. If you have a success story (still in progress) that can trump this one– let me know. I’m interested.
Wow must say I am quite impressed with not only the growth you fellas have had but also the way how you did it all on a credit card investment and not outside investors. Good luck in the future! I am going to keep my eye on this.
Excellent post Susan!
BTW for me “Excellent” = “informative, interesting, useful, on-point and well-written.
I’m going to do a bit of research and evaluation on Atlassian.
Best wishes for a wonderful weekend!
Susan,
Thanks for the great comments! Mike spoke highly of you after he came back from the conference – its great to see that you realize that ‘2.0’ doesn’t just apply to consumer, web-based products.
As for ‘rock stars’ – that’s a title that we’ll both have to grow in to!
Cheers,
Scott