Atlassian Mindville acquisition is investment in IT service management

• Atlassian announced during its fourth quarter earnings on July 30 that it’s acquiring Swedish startup Mindville, which helps companies track and manage the IT services they’re using.
• Atlassian has been investing heavily in IT service management: In the past few years, it has also acquired the incident management company Opsgenie, Automation for Jira, and ticketing company Halp.
• Besides IT service management, Atlassian has been investing in its cloud offerings. 
• Visit Business Insider’s homepage for more stories.

In the past few years, $43 billion Australian software giant Atlassian has been investing aggressively in IT service management, with products geared towards allowing customers to manage and respond to incidents like outages. 

Most recently, Atlassian announced in its July 30 fourth quarter earnings call that it’s acquiring Swedish startup Mindville, which helps companies track and manage the services they’re using. Neither Atlassian nor Mindville disclosed the terms of the deal. 

This is the latest in a series of similar acquisitions that Atlassian has made in IT service management, including the incident management company Opsgenie in late 2018, Automation for Jira late 2019, and ticketing company Halp in May 2020. 

Meanwhile, Atlassian’s own IT management product, Jira Service Desk, has also seen significant growth during the coronavirus pandemic. 

For large businesses especially, IT service management (ITSM) is becoming a top need, and Atlassian is increasingly working to become a major player in the space, competing with companies like ServiceNow.

“Mindville is a cornerstone of the ITSM strategy. It’s one of the key aspects that will allow us to grow in the IT space,” Edwin Wong, head of product at Atlassian, told Business Insider. “With various acquisitions already made, we want to continue that journey. It’s a modern and different take on IT for our customers.”

Atlassian had already been partnering with Mindville

Mindville allows customers to better understand the hardware and software services they’re using and see how they’re linked. For example, if a company wants to make a technical change, they can learn about how risky the change is, what services might break, and what teams will be impacted. 

In the past, software releases could take six months to one year, but now the process moves much faster: Teams can release updates multiple times a day. Because of that, there’s a greater need to manage IT services, Wong says. 

“You start to realize that IT roles have started to become really different ones,” Wong said. “They’re much more software-centric. How you go about delivering software services will be one of the key muscles that organizations seek to build.”

Atlassian had already been partnering with the company, which has over 1700 customers, including NASA, Samsung, and Spotify. Now, Atlassian plans to integrate Mindville with its other product offerings like Jira Service Desk.

The product is more important than ever as the coronavirus pandemic changes how many companies conduct business and forces them to quickly move to digital tools. 

Read more: Over half of developers are responding to IT issues more slowly than usual, according to a survey by Atlassian, the company that makes one of the most popular ticketing tools

While Atlassian is increasingly competing with ServiceNow, both companies have different ways of approaching customers, says Gregg Moskowitz, managing director at financial services firm Mizuho. While ServiceNow sells its products in a top-down way to large businesses, Atlassian focuses on getting developers on board, who then bring the product to their companies.

“It’s going to be years before these vendors are countering each other,” Moskowitz told Business Insider. 

Atlassian is investing heavily in cloud

In addition to IT service management, Atlassian is focusing on its cloud business in the coming year, and is working to hire more engineers, build more cloud products, and create migration tools and discounts, as well as partner services. Cloud has become Atlassian’s first and foremost priority, Moskowitz says.

When the Australian software giant first launched in 2002, its products were designed to be run on private data centers. What could have been a weakness has since turned into a strength, as Atlassian now offers products on both the cloud and traditional servers. Currently, most users of products like Jira and Confluence use private data centers, so there’s a big opportunity for Atlassian to help them move to the cloud. 

“That can be very important because if customers like what Atlassian has to offer, it’s going to make new customers much more likely to buy more products from Atlassian than they otherwise would,” Moskowitz said. “That’s an absolutely important part of the whole story.”

Atlassian’s most recent earnings beat Wall Street’s expectations as it announced that it generated $430.5 million in revenue, up 29% from the same time the year before. Still, the company also estimated that it faced a $10 million impact the past quarter due to the coronavirus pandemic as small business customers were hit especially hard. Still, analysts expect to  see long-term growth from Atlassian.

“We see the company benefiting from higher cloud pricing uplift longer term and believe its cloud platform investment will drive more efficient product innovation going forward,” Arjun Bhatia, research analyst at William Blair, wrote in a note to clients, “Enabling Atlassian to build on its competitive advantage and drive long-term sustainable growth.”

Got a tip? Contact this reporter via email at rmchan@businessinsider.com, Signal at 646.376.6106, Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by email only, please.) Other types of secure messaging available upon request.