Atlassian Corporation Plc announced to sell its communication tools HipChat Cloud and Stride to the rival Slack Technologies Inc. As per the deal, Slack will pay an undisclosed sum to acquire the intellectual property (IP) for Stride and HipChat over three years and Atlassian will take a small stake in the former company.

With this, the Australia-based software enterprise giant, Atlassian made way to discontinue its real-time communication products for the internal organization. The company now aims to focus on its core expertise, which is, developing project management products.

Joff Redfern, VP of Product Management, Atlassian mentioned in a statement, “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.”

Atlassian share climbed 15 percent at the extended hours of trading after Slack Co-founder and CEO Stewart Butterfield made the collaboration public on Twitter.

He added that both the payment and the investment by Atlassian in his company are “small” in financial terms “but symbolically important”.

Slack and Atlassian Teams Working Together

Following the association, more than 2600 employees of Atlassian will start using Slack services. Atlassian has also suggested the clients of HipChat and Stride to transition over to the new enterprise chat platform before it shuts down the sold services in 2019 February.

Correspondingly, both the companies boast to leverage the benefits of integration on their existing platforms plus create new experiences for the users. Slack will strengthen its association with Atlassian portfolio comprising Jira, Bitbucket Cloud, and Trello. Moreover, the alliance is planning to introduce new products together at the user conference, Atlassian Summit, to be organized between 3-5 September in Barcelona.

Competing Microsoft Teams

Atlassian, the developer of top project management products, launched HipChat as a collaboration tool back in 2010, and then replaced it by an advance chat app ‘Stride’ in September 2017. However, the company could not achieve the anticipated outcome from the diversified platform.

The current decision of discontinuing the services comes in view of tough competition in office real-time communication space. Now, the market is crowded with popular products like Microsoft Teams, Workplace by Facebook, Twist, Google Hangouts Chat and many more. However, Slack, a real-time collaboration app and platform, stands far ahead of these collaboration software products since its inception in 2014.

Alan Lepofsky, Constellation Research Inc. Vice President and Principal Analyst informed SiliconANGLE, “Atlassian tried to add new collaboration features for its user base with Stride, but was ultimately too late because a majority of them were already invested in the Slack ecosystem.”

Slack claimed in May this year it owns a client base of 500,000 corporate that makes up to 8 million active users including 3 million paid users.

On the other side, the top competitor Microsoft reported that about 200,000 organizations use Teams for internal communications. In fact, it recently released a free version of Teams to woo non-subscribers of Office 365.

Adding to this, Facebook today acquired Redkix, a start-up merging mail, messaging and calendar features into one app, to boost enterprise communication services on Workplace.