Atlassian shares soar on news it will sell chat products to Slack through new strategic partnership

Australian software giant Atlassian will sell its HipChat and Stride chat products to Slack as part of a new “strategic partnership” between the two companies, sending Atlassian’s share price skyrocketing 18%.

In its 2017-18 fiscal year report, Atlassian revealed the sale, which will see its HipChat and Stride users integrated into rival Slack’s system. HipChat is a longstanding part of the tech company’s project management software suite, whereas Stride was a new offering pitched as a ‘successor’ to HipChat, revealed in September last year.

Stride was reportedly not received as favourably as expected, meaning the sale to Slack will be a boon for Atlassian, which has tried to directly compete with the younger startup in the realms of real-time chat offerings.

Atlassian will receive a small equity stake in Slack, and Slack will pay Atlassian an undisclosed amount over the next three years to acquire the software.

“We are excited to join forces with Slack to target the immense markets for team collaboration and communications,” Mike Cannon-Brookes, Atlassian co-chief executive and co-founder, said in a statement.

“The partnership enables us to offer our customers the best of both worlds — Atlassian’s leading collaboration products combined with Slack’s business communications platform. This decision also supports Atlassian’s broader product and investment strategy in fiscal 2019 as we continue on our mission of unleashing the potential of every team.”

… • Atlassian is making a small but symbolically important investment in Slack • We’re committing teams on both sides to create deeper and more powerful integrations between Slack and the Atlassian family of products — there’s so much to do here!

— Stewart Butterfield (@stewart) July 26, 2018

Slack and Atlassian have had a friendly rivalry for some time, with the chat startup sending the Aussie tech company a cake late last year to celebrate its release of Stride. The company was responding to a cake Atlassian sent Slack to celebrate the startup’s one year anniversary, which Slack said at the time it still viewed as an act of “good grace and fair play”.

Atlassian also revealed in a blog post that the company’s 2,600 employees will begin to use Slack, and Slack’s employees have been using Atlassian products for many years.

“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,” April Underwood, Slack’s chief product officer said in a blog post.

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