Software teams needed a shared record of defects: what was broken, who owned it and how the fix was progressing. Bug trackers already did this job, and in 2002 Bugzilla was the best known of them AT7. A development team could judge such a tool for itself, but its budget and its authority to buy were far smaller than a central IT department's AT1. For a team, the practical question was whether a paid tracker gave enough over the software it already had to be worth the money and the approval.
Atlassian
Atlassian sold a professional issue tracker online at team prices with no salespeople, let outside developers add what it lacked, and spread through the practitioners who used it, until configured workflows and apps made Jira the tool companies kept.
How Atlassian won
- 1 · 2002–15A professional issue tracker bought online at team prices, with no salespersonAmerican Airlines bought Jira from the website with no sales contact (2003); $10 for 10 users (2009); sales and marketing 12–21% of revenue before the IPO.Self-Serve Only
- 2 · 2008–16Outside developers extend Jira, starting with agile boardsGreenHopper, a third-party plug-in with 700+ customers, became Jira's agile planning (2009); the Marketplace passed 2,000 add-ons by 2016.App Marketplace
- 3 · 2008–17Practitioners recommend it: user groups, Summit and word of mouthUser groups from 2008 and the first Summit (2009); Jira named 24 times to Rally's 10 by Agile Alliance members (2010); used by 58% of agile teams surveyed (2017).Practitioner Community
- 4 · 2009–16One team's small purchase spreads to more teams and productsInterspire bought five Atlassian tools in eight months (2009); 11,000 customers (2010) grew to more than 60,000, including 291 of the Fortune 500 (2016).Multi-Product
- 5 · 2016–25Switching costs: configured workflows and installed appsMarketplace apps in more than 60% of customers and over 80% of the largest, with $1B of lifetime app sales (2019).Switching costs
Versus Rally Software: Rally sold agile management to enterprises through salespeople and coaches at $35 or more per user a month. Atlassian sold Jira online to any team for a few dollars, let outside developers add the agile boards Rally sold, and let practitioners carry it from team to team.
Arena: Market Conditions Before Atlassian
How each step happened
Step 1 of 5 · 2002–15
A professional issue tracker bought online at team prices, with no salesperson
Atlassian's innovation was selling a professional issue tracker the way people downloaded software, not the way companies bought enterprise software. A team could find Jira online, try it and buy it at a published price; American Airlines did so in 2003 with no sales contact ATC-1. Rally, which later named Atlassian first among its primary competitors, sold through a direct sales force ATC-9. With no salesperson to talk a buyer into a six-figure contract, Farquhar says, the price had to be very reasonable; early on, everyone at the company was an engineer ATC-2.
The founders knew the job: supporting other companies' support teams, they were frustrated with the bug trackers available and built Jira in 2002 ATC-1. Stefan Kleineikenscheidt, whose team found it online, recalls that "everyone on the team loved it" AT7.
A price a team could approve
Jose Morales, who later led field operations, says the first product cost $800, and flying to sell it "probably doesn't make a lot of sense" AT8. In 2009 Atlassian cut the entry point from a 25-user license to $10 for 10 users, which Morales calls "a big impact" AT8. Ben Gilbert chose paid Confluence over free MediaWiki at Cisco in 2008 because his manager could approve it without procurement AT1. The 2016 filing describes entry prices "orders-of-magnitude less than the price of traditional enterprise software" and no quota-carrying salespeople AT12. Before the 2015 IPO, sales and marketing took 12–21% of revenue; research and development took over 40% AT10.
Rivals Rally sold one-year subscriptions through its direct sales force ATC-9. Beyond a free edition for up to 10 users, its Enterprise Edition started at $35 per user per month in 2010 ATC-12, and sales and marketing took 72.9% of its revenue in fiscal 2010 and 57.0% in fiscal 2012 ATC-9.
Self-Serve OnlyPenetration PricingFounder Domain ExpertiseFree Trial
Step 2 of 5 · 2008–16
Outside developers extend Jira, starting with agile boards
This step runs alongside step 1: while teams bought Jira online, outside developers were writing add-ons for it. Atlassian let them fill what Jira lacked, and the most valuable gap was agile planning, Rally's market. GreenHopper, a Jira plug-in built by Pyxis Technologies with planning boards, task boards and burndown charts, had more than 700 customers when Atlassian bought it in 2009 ATC-3 ATC-4. An outside developer had proved the demand; Atlassian made it Jira's agile planning. Interspire's Mitchell Harper says GreenHopper's integration is "what got us on Jira" AT9.
In May 2012 the Marketplace opened with 60 apps, one place to find, buy and license add-ons ATC-5 AT12. Specialists built what Atlassian would not: K15t, which Kleineikenscheidt co-founded, built Scroll for documentation export, versioning and translation in Confluence AT7 AT13. By June 2016 there were more than 2,000 add-ons, and customers had bought over $150 million of them, more than $120 million going to partners AT12. Each app fitted Jira or Confluence to one more team's work. Atlassian still set the terms: when it stopped selling new Server licenses in 2021, it covered some app refunds for partners AT14.
Rivals Rally built or licensed its extra modules, such as idea and quality management, into its own higher-priced Unlimited Edition at $49 per user per month (2010) ATC-12, and bought AgileZen and Flowdock ATC-13.
Step 3 of 5 · 2008–17
Practitioners recommend it: user groups, Summit and word of mouth
Community also began within step 1's years, once enough teams used Jira to meet. From 2008 Atlassian funded user groups that customers ran independently, and in 2009 it held its first Summit, for about 340 customers ATC-1. These were the people who ran Jira at work, and they taught and recommended it to each other; K15t first showed its add-on at an Atlassian User Group AT7. The 2016 filing says "one happy user will beget another", and credits word of mouth for building the brand "with relatively low sales and marketing costs" AT12, which kept step 1's prices possible.
The recommendations reached Rally's buyers. In February 2010, Agile Alliance members asked on LinkedIn for agile tools named Jira with its add-ins 24 times, VersionOne 11 and Rally 10 ATC-7. In VersionOne's 2017 State of Agile survey, 58% of respondents used Jira, more than any other tool ATC-8.
Rivals Rally reached teams through its direct sales force and sold its platform together with transformation consultants and agile coaches ATC-10 ATC-11; its professional services revenue was $10.6M in fiscal 2014 ATC-10.
Step 4 of 5 · 2009–16
One team's small purchase spreads to more teams and products
A cheap first purchase put Atlassian inside an account; each next product had to earn its own place. Interspire, a Sydney software company, began in March 2009 with a trial of the Bamboo build server after finding CruiseControl too weak AT9. It then replaced Redmine with Jira so customers could see its roadmaps, added Crowd for single sign-on, and replaced its intranet with Confluence once management kept meeting notes there: five products in eight months, with no "bureaucracy around making purchase decisions" AT9.
Across the base, customers grew from about 11,000 in 2010 to more than 60,000 in 2016, ranging from small groups using one product to 291 of the Fortune 500, many using several products across thousands of users AT10 AT12.
Spreading had limits. Atlassian bought Trello in 2017 to reach less structured work AT6, but in 2018 closed its chat product, Stride, and partnered with Slack AT4. By fiscal 2025 it used a direct sales force and solution partners to expand its largest customers; revenue reached $5.2 billion, with a $130 million operating loss AT3.
Rivals Rally also landed and expanded, but through direct sellers: by fiscal 2014 it had more than 1,100 customers and 214,047 paid users, with a $20.1M net loss on $74.3M of revenue ATC-10. CA Technologies agreed to buy it in May 2015 for about $480M ATC-11.
Step 5 of 5 · 2016–25
Switching costs: configured workflows and installed apps
The spread in step 4 and the apps from step 2 make Jira hard to leave. A team that has set up issue fields, workflows and integrations must rebuild that work if it moves; the 2016 filing calls the products "deeply entrenched in how people work together and how organizations run" AT12. By December 2019 more than 60% of customers, and over 80% of the largest, used at least one Marketplace app or integration, and lifetime app sales had passed $1 billion ATC-6. A company that leaves Jira must replace its apps too.
The barrier holds only while the configuration stays useful. Oscar Health had so many custom fields that it reached Jira's limit; in 2025 it moved more than 600 people to Linear in just over a month, importing backlog history and leaving the old fields and workflows behind AT11. "People haven't missed all those custom fields and workflows," says staff engineer Pete Zalewski AT11. Ending Server support in February 2024 also made customers choose between Cloud and Data Center AT5. Step 1's low price brought teams in; the work they built on top keeps them.
Rivals Rally's independent run ended in 2015, when CA agreed to buy it ATC-11. The later challenge came from simpler trackers such as Linear, which won Oscar by making the old configuration unnecessary AT11.
Key dates
- 2002Atlassian founded; Jira built for software teams AT12 ATC-1
- 2003American Airlines buys Jira online, with no sales contact ATC-1
- 2009First Summit, about 340 customers; user groups funded since 2008 ATC-1
- 2009$10 for 10 users replaces the 25-user minimum AT8
- 2009-03Interspire starts with Bamboo; five products in eight months AT9
- 2009-06GreenHopper, a third-party agile plug-in, bought ATC-3
- 2010-02Agile Alliance members name Jira 24 times, Rally 10 ATC-7
- 2010-06Rally Enterprise Edition from $35 per user per month ATC-12
- 2012-05Marketplace opens at Summit with 60 apps ATC-5
- 2013-03Rally files to go public, naming Atlassian first among competitors ATC-9
- 2014-06$215M revenue Fiscal year to June AT12
- 2015-05CA agrees to buy Rally for about $480M ATC-11
- 2015-12IPO at $21 a share 22 million Class A shares sold AT12
- 2016-06$457M revenue Fiscal year to June, +43% year over year; more than 60,000 customers AT12
- 2018-07Stride closed; partnership with Slack AT4
- 2019-12Marketplace passes $1B in lifetime app sales ATC-6
- 2024-02Server support ends AT5
- 2025Oscar moves 600+ people from Jira to Linear AT11
- 2025-06$5,215M revenue Fiscal year to June, +20% year over year; $130M operating loss AT3
Sources
Oldest first.
- ATC-3 Atlassian Acquires GreenHopper for Agile Software Development. Company announcement
- ATC-4 Atlassian acquires GreenHopper. Contemporaneous trade press
- AT9 Interspire: going Scrum improves dev speed 30–40%. Vendor-hosted customer interview
- ATC-7 Agile Tool – Expert Recommendation. Practitioner tally of a professional forum thread
- ATC-12 Rally Software Announces Unlimited Edition. Company press release
- ATC-9 Rally Software Development Corp. Form S-1. IPO registration statement
- ATC-13 Agile Project Management Software Development Company Rally Software Files For $70M IPO. Contemporaneous trade press
- ATC-10 Rally Software Development Corp. Form 10-K, fiscal 2014. Annual securities filing
- ATC-11 CA Technologies Agrees to Acquire Rally Software. Acquisition press release
- AT10 Benchmarking Atlassian’s S-1: How 7 Key SaaS Metrics Stack Up. Public investor analysis
- AT12 Fiscal 2016 Form 20-F. Annual securities filing
- AT6 Atlassian + Trello: changing the way teams work. Company announcement
- AT1 Episode 47: The Atlassian IPO. Podcast transcript
- AT8 Top Sales Lessons Scaling to $100m ARR. Operator panel transcript
- ATC-8 12th Annual State of Agile Report. Vendor-run practitioner survey (1,492 responses, Aug–Dec 2017)
- AT13 Learn about how Stefan K. built one of the first ever Marketplace Partners. Vendor-hosted partner history
- AT4 Announcing our new partnership with Slack. Company announcement
- ATC-6 A milestone moment: $1B in lifetime sales. Company post
- AT14 End of new server sales: resources and support for the ecosystem. Company announcement
- ATC-2 Atlassian Co-CEO Scott Farquhar on smart pricing and compassionate philanthropy. Founder interview
- ATC-5 Celebrating 10 years of the Atlassian Marketplace. Company post
- ATC-1 20 years of Atlassian, 20 lessons learned. Company retrospective of founder lessons
- AT5 Farewell Server, Hello Cloud. Company announcement
- AT7 Why (and How) I Co-Founded K15t Software. Participant retrospective
- AT3 Fiscal 2025 Form 10-K. Annual securities filing
- AT11 How teams at Oscar left one of the world’s most complex Jira instances. Rival-hosted customer testimony
- R14 Klaviyo boosts visibility and velocity with Linear. Challenger-hosted named customer exit account