HipChat Maker Atlassian Cedes Chat Software Battle to Slack; Takes Equity Stake

Slack is now hip. And HipChat? Square.

Slack has purchased the intellectual property rights to competing products from its longtime competitor Atlassian, which announced on Thursday that it will halt development on HipChat and Stride and migrate current users to its rival’s software. Atlassian will receive a small stake in Slack, which is privately held and valued at about $8 billion. Atlassian’s central services for the products in question will continue to run through Feb. 15, 2019; specialized corporate options will shut down through June 2020.

The companies made the announcement jointly on their websites. Slack CEO Stewart Butterfield followed with commentary in a brief series of posts on Twitter.

Moving forward, the true competitor for the now-friendly companies is Microsoft, which offers its Teams group communication system to 135 million Office cloud-based subscribers. Facebook offers its own system, called Workplace, but has made far fewer inroads in the corporate world. Facebook’s last update on usage, in October 2017, said about 14,000 organizations were using Workplace, but didn’t disclose use numbers. Slack said in May that it has 8 million daily active users, 3 million of which are in paid teams. With a free tier, Slack has 500,000 teams registered, of which 70,000 pay a few to tens of dollars per user per month.

Launched in 2010, HipChat was a successful early model for managed corporate chatrooms that combined aspects of social networking with the need for IT control, provision, oversight, and archiving. Stride was intended as its replacement and was released in Sept. 2017. Slack, an outgrowth of a failed multiplayer online video game, launched in 2013 and rapidly captured market share.

The deal with Slack allows Atlassian to focus on its successful products for software development and product management, including the ticketing management system Jira and Trello, a card/stack/board-structured project management system.

Atlassian said it planned to deepen integration between its remaining products and Slack, which has a robust and deep approach for third-party tie-ins. It also said that its more than 2,600 employees will begin using Slack.

“We believe that this partnership is the best way to advance our mission to unleash the potential of every team,” the company wrote in its announcement. “And it will allow us to improve our focus in other areas.”

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