Atlassian sells Hipchat IP to Slack

Before Slack was a thing, Atlassian's HipChat was one of a number of internal messaging tools trying to beat the competition in a nascent market place. However, with Slack today dominating the messaging app landscape, Atlassian has given in. The Australian company has announced it will be selling the HipChat IP to and discontinuing the service in February 2019.

The financial details of the deal haven't been disclosed. However, Slack CEO Stewart Butterfield did reveal that Atlassian will be making a "small but symbolically important investment in Slack" in a tweet on Thursday July 26.

https://twitter.com/stewart/status/1022574806623895553

The deal is being presented as a partnership rather than a straightforward acquisition. On the Atlassian blog, for example, Joff Redfern, VP of Product Management was keen to stress that this was a partnership:

"We have always had a spirited yet friendly competition with Slack (and have even sent each other congratulatory cookies and cake!). Across our product portfolio, we have long shared many integrations, which hundreds of thousands of teams use every day. Through this new partnership, both companies will lean into building better integrations together and more sharply define the modern workplace experience for companies everywhere."

As well as Hipchat, Slack is also purchasing the IP for Stride, another messaging app released in 2017 by Atlassian in September 2017. Stride was initially designed to succeed Hipchat, but Redfern explained that Slack's dominance of the current market meant this step simply made sense for Atlassian. "While we’ve made great early progress with Stride, we believe the best way forward for our customers and for Atlassian is to enter into a strategic partnership with Slack and no longer offer our own real-time communications products."

Hipchat Server and Hipchat Datacenter will also be discontinued. Conscious that this could lead to some real migration challenges, Atlassian has put together a detailed migration guide.

Who wins in the Slack and Atlassian deal?

The truth is that both parties have struck a good deal here (financial details notwithstanding). Atlassian, as it acknowledges simply couldn't compete in a market where Slack seems to dominate.

For Slack, too, the deal comes at a good time. Microsoft's Teams App is set to replace Skype for Business in Microsoft's Office 365 suite. A free version, released earlier this month which doesn't requite an Office 365 subscription could also be some cause for concern for Slack.

The one group that loses: users

Although the deal might work out well for both Slack and Atlassian, there was considerable anger on Atlassian's community forums. One asked "What the hell are on-premise customers supposed to do?! We just implemented and invested in this app! We're building apps in-house for our own purposes. We have zero ability to use Cloud services of ANY type. You are offering ZERO alternatives."

One user outlined his frustrations with what it means for migration: "We needed a chat platform. We did research and after a long time landed on hipchat. We had to pull teeth to get users to move to it. We transitioned bots and automations over to hipchat."