Atlassian 'Doubling Down' on Cloud Means More Margin for Partners

Approximately 500 systems integrators do one-third of the business Atlassian, the maker of Jira team collaboration and productivity software, brings in, and the company hopes the new margin incentives it introduced on Thursday will add to that activity.

The changes come as Atlassian unveiled updates to its cloud platform; the company aims to shift more revenue to that computing model.

Atlassian competes against the likes of Microsoft Project and wants to capture more market share. Indeed, Grand View Research forecast late last year that the global team collaboration software sector would exceed a compound annual growth rate of 9% between 2018 and 2025.

Capitalizing on all that opportunity means getting the attention of even more enterprises and other organizations adopting cloud technologies. Atlassian already serves 83% of the Fortune 500 and says each uses at least one of its cloud platforms.

Atlassian’s Martin Musierowicz

Still, the company wants to ramp up those numbers and is looking to untapped opportunity.

“We shared in a recent investor newsletter that 50 percent moved from self-hosted to cloud in the last year,” said Martin Musierowicz, head of global channels for Atlassian. “To make that seamless, we have new tools and programs.”

Those additions are important for channel partners to understand because they are tied to compensation changes.

The updates start with new pricing and packaging plans for Atlassian Cloud products:

As governments around the world tighten data and security compliance requirements, vendors must respond. To that end, Atlassian soon will allow customers to choose where in its global data center footprint they want to store their content. This is important for adhering to laws including the European Union’s General Data Protection Regulation.

The company also now provides data encryption at rest and in transit. This means only authorized users may gain audited access to encryption keys.

Atlassian recently released its Trust Center, as well, which lays out the latest security, reliability, privacy and compliance road map for its products and services.

Finally, Atlassian users may customize their Jira and Confluence Cloud sites with tailored URLs. Access to this capability starts early next year with Jira customers.

Atlassian further has beefed up the Atlassian Access administrator console. Highlights of new capabilities include:

Atlassian wants to get more users off its servers and …

… into the cloud. To heighten the appeal of that model, it is offering the following:

New Channel Partner Incentives

And now to the meat for partners.

“Helping customers on their cloud journey wouldn’t be possible without enabling and empowering our channel partners,” Farquhar wrote. “We’re excited to extend our cloud-first approach to solution partners through a new incentive structure that will better educate and enable them through our cloud sales model.”

Musierowicz agreed.

“We’re doubling down. We’re putting a huge effort into cloud and rewarding partners that want to be on that same journey,” he said.

That huge effort amounts to the first change to partner margins and discounts in seven years.

“It’s certainly a big deal. It supports where the world is headed,” Musierowicz added.

To that point, Atlassian has raised margins by 10% for partners selling new cloud business. On top of that, it is paying a migration bonus of another 15%. All in all, partners can make 50% margin total – based on the existing margin of 25% and the new, extra 25% – for migrating on-premises users to cloud.

Cprime’s Zubin Irani

“This news is encouraging because it aligns our incentives with Atlassian’s business strategy and the future of technology,” Zubin Irani, CEO of consulting firm Cprime, told Channel Futures. “The additional margins and migration bonus allow partners to invest in tools, automation and training of staff to ensure that we can continue to provide world-class support to Atlassian customers wanting to move their instance to Atlassian’s cloud.”

Thad West, CEO of ISOS Technology, expressed similar enthusiasm.

“We are extremely excited about the changes and believe they align with the significant investment Atlassian continues to make in its cloud platform to make it a great option for customers,” he said.

Incentives are great, Musierowicz said, but so is partner enablement. Knowing that, Atlassian has developed a playbook that helps partners talk about customer environments. The resource discusses when it makes sense to move to cloud, how to do so according to best practices and ways to take advantage of support.

The playbook is key to success, West noted.

“It is a building block used by our sales team to help organizations understand the journey to cloud,” he said.

The resource is giving Irani’s sales, marketing and delivery teams “the information we need in an easy-to-find manner. It’s already proven to us to be a valuable asset and our teams rely on it every day,” he said.

Regarding general partner enablement, Atlassian offers on-site boot camps, marketing development funds, and a customizable marketing platform with content, webinar hosting, email campaigns, demand generation and more.

Atlassian avoids channel conflict by paying its inside sales team no matter what, and by eliminating commissions for the channel team.

Musierowicz said Atlassian does all this because the company looks to partners “to carry the Atlassian flag.”