HipChat Maker Atlassian Calls It Quits, Sells to Rival Slack

The saying “If you can't beat them, join them” certainly holds true for Atlassian and Slack. The former is selling its rights to HipChat and Stride to rival Slack and will even making a small investment in the company.

The surprising news was announced recently by Slack CEO Stewart Butterfield. Aside from tweeting his company's purchase of the two products, he also explained that the move was to “better support those users who choose to migrate” to Slack. Joff Redfern, Atlassian's VP of Product Management, also confirmed the news. In a blog post, he said this was the “best way forward for our customers and for Atlassian.”

Details: • Atlassian is discontinuing Hipchat/Stride • Slack is purchasing the IP to better support those users who choose to migrate • We’re both working closely together to make sure that’s as simple and painless a process as possible …

— Stewart Butterfield (@stewart) July 26, 2018

What was not as surprising was the revelation that the company would be shutting down both HipChat and Stride. The former is one of Slack's main competitor in the workplace chat arena while the latter is a chat and collaboration system that Atlassian rolled out in 2017.

Atlassian clarified that they only sold the intellectual rights to HipChat and Stride and that Slack will not be handling support for the two products. However, existing HipChat Server and HipChat Data Server customers will still enjoy product support until their license period ends. The two products will be discontinued on February 15, 2019.

Slack and Atlassian will also be working together to migrate all of the enterprise giant's users over to Slack. The two companies will also be collaborating in developing future integrations. Atlassian will also be receiving a small stake in Slack, with the startup paying an undisclosed amount to the company in the next three years.

Atlassian tried hard to remain competitive in the office chat space environment by moving its HipChat users to Stride. Aside from the usual chat and communication features, Stride also offered project-tracking and audio and video conferencing. However, the revamped system just wasn't enough to bring in new users and the company started to consider selling.

Shout out to all of the Atlassians who worked their asses off building Stride + Hipchat We built a great product. I’m deeply grateful for every effort, big and small, that every Atlassian contributed. What a journey. What a team! @atlassian #team https://t.co/fVd058AF4x

— Mike Cannon-Brookes (@mcannonbrookes) July 27, 2018

Atlassian co-CEO Mike Cannon-Brookes told Bloomberg that they're proud of what their team has built, but also admitted that “it is a crowded space, and there's a pragmatic option there.”

The alliance between the two rivals makes sense, especially with Microsoft chipping away at Slack's dominance in corporate chat software. Microsoft has put the pressure on with its Teams software, which is now available to its 135 million Office cloud subscribers. It has also released a free version of Teams to attract new users. At the moment, Slack reportedly has 500,000 live organizations using its system while Microsoft says 200,000 active organizations are using Teams.

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