Australian software giant Atlassian and Envoy, a startup that provides workplace management services, were at loggerheads on Thursday over a data breach that exposed the data of thousands of Atlassian employees.

As first reported by Cyberscoop, a hacking group known as SiegedSec leaked data on Telegram this week that it claimed to have stolen from Atlassian. This data includes the names, email addresses, work departments and phone numbers of approximately 13,200 Atlassian employees, along with floor plans of Atlassian offices located in San Francisco and Sydney, Australia.

“SiegedSec is here to announce that we have hacked the software company Atlassian,” SiegedSec said in a Telegram message seen by TechCrunch. “This company worth $44 billion has been pwned by the furry hackers uwu.” SiegedSec made headlines last year after it leaked eight gigabytes of data from the state governments of Kentucky and Arkansas, in protest at the states’ efforts to enact abortion bans following the Supreme Court’s decision to overturn Roe v. Wade.

Atlassian was quick to point the finger of blame for the breach at Envoy, which the Sydney-headquartered company uses to organize its office spaces. “On February 15, 2023, we learned that data from Envoy, a third-party app that Atlassian uses to coordinate in-office resources, was compromised and published,” Atlassian spokesperson Megan Sutton said in a statement shared with TechCrunch. “Atlassian product and customer data is not accessible via the Envoy app and therefore not at risk.”

Envoy, however, was just as quick to rebuff Atlassian’s claims. Envoy spokesperson April Marks told TechCrunch that the startup is “not aware of any compromise to our systems,” adding that initial research had shown that “a hacker gained access to an Atlassian employee’s valid credentials to pivot and access the Atlassian employee directory and office floor plans held within Envoy’s app.”

Soon after the startup’s denial, Atlassian changed its stance to align more closely with Envoy. Atlassian’s Sutton told TechCrunch that the company’s internal investigation since revealed that attackers had actually compromised Atlassian data from the Envoy app “using an Atlassian employee’s credentials that had been mistakenly posted in a public repository by the employee.”

“As such, the hacking group had access to data visible via the employee account which included the published office floor plans and public Envoy profiles of other Atlassian employees and contractors,” Sutton added. “The compromised employee’s account was promptly disabled eliminating any further threat to Atlassian’s Envoy data. Atlassian product and customer data is not accessible via the Envoy app and therefore not at risk.”

Envoy initially declined to answer our specific questions, but on Friday, the company’s spokesperson provided an update, ruling out a breach on its end.

“We found evidence in the logs of requests that confirms the hackers obtained valid user credentials from an Atlassian employee account and used that access to obtain the affected data from Envoy’s app,” said Envoy’s Marks.

While it appears that Envoy was not at fault for the Atlassian data breach, the workplace management startup — which counts a number of big-name customers, including Hulu, Pinterest, Slack and Stripe — is no stranger to security incidents. In 2019, security researchers at IBM uncovered two flaws in Envoy’s visitor management system that could have exposed customer data.

Updated with Envoy comment.

Atlassian (NASDAQ:TEAM) is an Australian-founded software company that has a mission to "unleash" the power of teams globally. The company's product Jira was named a leader for agile software development teams by both the State of Agile report (2021) and Gartner in 2022. Its "product-led" growth strategy has been tremendously successful over the years and enabled continued customer growth. In Q2,FY23, Atlassian reported solid financial results as it beat top-line growth estimates. The business did miss on its GAAP earnings estimates, but beat analyst estimates on a non-GAAP basis. In addition, I discovered that despite the company being criticized as "unprofitable", over 50% of its "expenses" are really investments into Research & Development [R&D]. Even more amazingly, when I adjust or "capitalize" these expenses the company's operating margin actually rises to over 10%. In this post I'm going to break down the company's latest financials as well its valuation and expense profile; let's dive in.

Financial Breakdown

Atlassian reported strong financial results for the second quarter of the fiscal year 2023. Revenue was $873 million which increased by a rapid 27% year over year. This growth rate is slightly slower than the prior quarter's growth rates of between 30% and 36%, which was expected due to the "recessionary" macroeconomic environment which has caused a slowdown in the number of users transitioning from freemium to paid plans. A positive is Q2, FY23 revenue still beat analyst estimates by $27.14 million.

Breaking down revenue by region, Atlassian reported strong revenue growth of 30% across EMEA and Asia Pacific regions. The Americas showed signs of weakness with 23% growth, but this wasn't helped by a strong prior year which made the comparable unfavorable.

Its overall revenue growth was driven by 4.9% year-over-year customer growth to 253,177.

On the below graphic you can see an overview of Atlassian's product line, which includes its flagship Jira for Agile/DevOps, in addition, to an I.T service management tool and work management tools such as Confluence. The company also acquired Trello for team collaboration in 2017 and more recently acquired Chartio now Atlassian analytics for data visualization which I believe is a strong growth market, as organizations visualize their "big data". I have discussed the business model of Atlassian in more detail in my prior post, so you can read more about it there.

Digital Marketing Analysis | Brand Power

The beautiful thing about Atlassian's business model is the company can continue to acquire "free users" during tough economic times and then convert these to paid plans at a later date. A leading indicator of interest in Atlassian's product can be website traffic. Now although the exact google analytics data is unknown I can estimate this using various online tools. In the below chart we can see the company achieved ~14.1 million website visits in November 2022, this was up slightly from the 13 million in October 2022. Thus I am not surprised Atlassian reported a strong quarter (for Q2, FY23 or the Q4 calendar year). However, it should be that since November, website traffic has declined to 13.2 million visits in December and 12.3 million in January 2023. On a percentage basis, this works out as a ~12.9% decline since its peak in November. I expect this is mainly due to the "recessionary" environment which I will discuss in the "Risks" section. However, a positive is the drop in traffic is not substantial, e.g. 30%/40%, which would ring major alarm bells. However, this indicator is still worth watching in the future.

A positive for Atlassian is the company has a strong brand in the world of workplace software. To quantify this I have estimated the percentage of the company's website traffic from sources using an online tool. In this case, we can see over 50% of the company's website traffic is from the "direct" method. This basically means over half of Atlassian users are heading straight to Atlassian.com as opposed to entering via search engines or advertising. This is one indicator the company has a strong brand, which will result in lower customer acquisition costs than its competitors. This can also be seen as a competitive advantage against new startups, which may try to enter the space and have to spend substantial amounts on advertising just to obtain users.

Atlassian also obtains 14.82% of its traffic from referrals and over 32% of its traffic from Search. As a Digital Marketing agency owner, I know SEO (Search Engine Optimization) rankings can be extremely valuable for a business. The reason for this is that if you can rank number one on Google consistently it can again lead to lower acquisition costs and improved marketing. In the tables below, you can see Atlassian ranks number one for over 1.28 million keywords, and its "branded keywords", Jira, Trello, and Confluence are searched heavily. I deem this similar to "direct traffic", which is a positive sign.

The final chart below you can see, Atlassian also has over 21 billion backlinks, which is the number of other websites linking to it. The Google search engine uses this as a primary indicator of where to rank a website. A new startup website, will not have this backing and thus will have to pay more to acquire customers.

Financials Continued

Breaking down revenue by deployment, In Q2, FY23 Atlassian generated 58.7% of its revenue from "Cloud" based deployment. This is up from the 52.9% of revenue generated in Q2,FY22. This is a positive sign as it shows the company's strategy of moving or "migrating" users to the cloud is working. This is great for the customers as it means, they often will receive faster product updates and access to more advanced features. In addition, Atlassian will benefit, as it will then need to provide less manual people-intensive support to legacy companies that use an on-premises server for their deployment. Atlassian has announced plans to stop its support for server products by February 2024, which should deliver customers enough time to migrate. Overall this is a positive strategy as it will drive down Atlassian's operating costs and the company can redirect internal resources toward cloud product improvement.

You can see a full breakdown of the positive trends below. Cloud-based deployments have skyrocketed by 41% year over year. While Server revenue has declined by 22% year over year. Without the context I laid out above, an investor may believe this is negative when it's actually a positive trend.

Margins and Expenses

Atlassian reported a super high gross margin of 82%, which declined by 2% year over year. Earnings per share [EPS] was negative $0.80, which missed analyst estimates by negative $0.34. A positive is on a Non-GAAP basis EPS was $0.45, which beat analyst estimates by $0.14.

Atlassian's main profitability challenges came from an eye-watering 47% increase in GAAP operating expenses. This may seem atrocious at first glance, but when I "pop the hood" on the income statement, I see the majority (58%) of its expenses were driven by Research & Development costs, which increased by 48.7% year over year. Overall I don't deem this to be a negative as I believe technology companies must continually invest in their product to stay ahead of competitors. Many studies also indicate that companies that invest in R&D tend to create more shareholder value long term.

The second major expense for Atlassian is Marketing & Sales, which made up 22.8% of operating expenses and increased by 53.8% year over year. It was interesting to see the company accelerate this expense during a tepid macroeconomic environment. I would personally like to see this decline as a portion of operating expenses moving forward at least for the next year. Overall Marketing and Sales expenses aren't "bad" assuming an ROI is obtained, but this is harder during a recessionary environment.

The final expense line item is general and administrative [G&A] expenses which contributed to 19% of total expenses to $156 million, up slightly from 20% in the prior year. As Atlassian operates a software company theoretically the business can execute high operating leverage, which should drive margin increase over time. In Atlassian's Q2,FY23 earnings call, management announced plans to "decelerate" operating expense growth in the second half of 2023, after previously announcing plans to reduce "discretionary" spending and "moderate" headcount growth. I believe this is a positive sign overall for profitability and I will discuss this in more detail in my "valuation and forecasts" section next.

Before diving into that, it should be noted Atlassian has a solid balance sheet with $1.6 billion in cash and cash equivalents, as well as $36 million in marketable securities. Its debt also looks to be manageable with a "term loan" facility equating to $999.5 million, which is "long-term debt" and thus manageable.

Valuation and Forecasts

In order to value Atlassian, I have plugged its latest financial data into my discounted cash flow model, with my forecasts for growth. In this case, I have forecast 25% revenue growth for "next year", which in my model refers to the calendar year 2023. This is in line with management's guidance of 25%, for the fiscal year 2023, which I have expanded to include the calendar year. Breaking this revenue down by type, Cloud revenue is forecasted to grow by between 35% and 40% year over year. With 10 points of this growth being driven by the aforementioned cloud migrations. In years 2 to 5, I have forecast a greater 36% overall revenue growth per year for the entire business. I expect this to be driven by improving economic conditions, which should result in a greater number of customers converting from free to paid plans. In the latest quarter, Atlassan's management noted it had seen tepid demand among its SMB customers, with fewer moving to paid tiers. I expect this dynamic to Boost post-2023. A positive for Atlassian is in the past few quarters, management has reported minimal issues with churn and upsell for its premium and enterprise customers. This makes complete sense as often large organizations can weather an economic storm much better than smaller businesses.

As mentioned prior Atlassian invests a huge amount (~58%) of its expenses into Research & Development. This is cited as an "operating cost", but to Boost the accuracy of the model I have "capitalized" this expense, which has boosted net income slightly and adjusted equity figures through "amortization", (annual balance sheet write down). I will not go deep into explaining this process, as it's beyond the scope of this post, but you can read more online. You can see from a screenshot of my model below, I have capitalized R&D expenses over a 3-year period, which has resulted in an adjustment or "boost" in operating income by $638.93 million.

The bottom line is with this accounting adjustment, Atlassian actually posts a positive 10.76% operating margin this year up from negative 10% in the trailing 12 months. Therefore the company can actually be deemed to be "profitable" on an adjusted basis. For "next year" I have estimated this margin to grow slightly more to 12%. I expect this to be driven by the aforementioned plans for the company to reduce its "discretionary" expenses in the second half of 2023. Over the next 8 years, I have been slightly more optimistic and forecast a 26% operating margin. This figure is based on the fact that the average operating margin for a software company is 21.8% (according to industry datasheets). I believe Atlassian is an "above average" company with a strong brand and leadership position (discussed prior), high retention, and a solid list of enterprise customers with plenty of room for upsell and improved cost efficiencies (from moving to a pure cloud model). Thus I have forecast a higher margin than the average for the industry long term.

Given these factors I get a fair value of $176/share, the stock is currently trading at $169.3 per share at the time of writing and thus is ~3.81% undervalued. Due to the quality of the company I deem this to be "fair value".

As an extra data point, Atlassian trades at a price-to-sales ratio = 13.56x, which is 47% cheaper than its 5-year average.

Risks

Lower Conversions/Recession

Analysts management has already started to see signs of lower free-to-paid conversion rates for its customers, with particular weakness in the SMB market. I forecast this trend to continue into 2023 as many economists have forecast a recession for the year. The good news is Atlassian still has a strong brand and can continue to "collect" free users, which will be poised to convert to paid as economic conditions improve.

Final Thoughts

Atlassian is a world-class software company that has continued to produce strong revenue growth despite a tough economic backdrop. Its "unprofitable" nature is not so bad when we see the majority of its expenses are related to R&D investments, which when adjusted boosted profitability to the green. Its stock is trading slightly undervalued intrinsically at the time of writing. This doesn't offer a major "discount" compared to many other technology stocks in the current environment (see my post Google). However, one cannot argue with the quality and potential of this SaaS company to continue to Boost its product and expand its margins.

Atlassian today announced that Jira Product Discovery, its tool for helping engineering and business teams prioritize and collaborate on new product ideas, is now in open beta, with general availability expected in the next three months. The company made the announcement at its Unleashed event in Berlin. Atlassian also announced that it will provide free access to Jira Work Management to all Jira Software customers until March 2024, in addition to a new set of customer-designed templates for using the entire suite of Jira products, which now include Jira Software, Jira Work Management, Jira Product Discovery and Jira Service Management.

Correction: Due to a misunderstanding, we previously said that the product was now generally available. Instead, it is now in open beta.

“Most software teams already have really good and efficient processes in place for building code, the delivery stage and the operation stage of software development. And we can really thank the widespread adoption of Agile and DevOps and, of course, the number one software development tool, Jira Software, for that. But in the discovery phase, it’s a bit of a mess, it’s a lack of structure, it’s not clear what’s going on,” Megan Cook, Atlassian’s head of product for its agile solutions, told me. She noted that figuring out that in many companies, when teams try to decide which new product features to build, the process can often feel like it’s happening in a vacuum or that it’s the loudest voice that gets to decide. Instead, those decisions should be outcome-driven — and that’s where Jira Product Discovery comes in.

Image Credits: Atlassian

Atlassian first announced this new service in 2021. Like Jira Work Management, it was incubated as part of the company’s Point A program, which brings together customers and Atlassian product development teams to better understand and address their needs.

“We found that three-quarters of product managers today they struggled to determine the true value of their product for their customers, and we really wanted to help with that,” said Cook. “They tend to use things like spreadsheets, mental notes, backlog — a lot of them told me about using email, you can imagine how terrible that would be. They’re totally disconnected from where software is planned, tracked and built. And then because it’s spread out like this, there ends up being no single location for this discovery phase.”

Image Credits: Atlassian

The idea here is to help teams capture ideas and feedback, provide them with tools to prioritize these ideas and engage with stakeholders to get these into the development pipeline. There is also a browser extension that makes it easier for users to bring in user feedback from across the web and, unsurprisingly, there is a deep integration with Jira Software to help teams keep their product plans in sync.

In practice, this means users will get tools to vote for ideas, talk about them and rate them according to their risk, impact, effort and other metrics. Jira Product Discovery also features a number of visualizations that can then help teams better understand the trade-offs between the impact of a given choice and the effort it’ll take to build a given feature, for example.

Image Credits: Atlassian

As for the free access to Jira Work Management for the next year, which until the launch of Product Discovery was the latest Jira version in Atlassian’s stable, the company noted that about 43,000 Atlassian customer already use Jira Software and Jira Work Management together.

“We’ve seen a lot of the benefits that having those teams working really well side-by-side can have,” Cook explained. “We know that this is a touch economic climate and it’s great just to be able to deliver back and spread those practices to our customers.”

Lastly, the new customer-designed Jira templates may not, at first, sound like a big deal, but they do look like an interesting way for Atlassian to get potential Jira customers to understand the overall value proposition of the entire Jira suite. Some of the companies that have put their names on these are UserTesting, Lumen and Code.org.

Atlassian Corp. today debuted Jira Product Discovery, a project management application designed to help companies develop new products and features more efficiently.

Nasdaq-listed Atlassian is a major provider of productivity software and development tools. Its best-known product is Jira Software, a task tracking application for developers. Atlassian’s products also lend themselves to a variety of other use cases that range from planning marketing campaigns to detecting server outages.

In large enterprises, the task of developing new product ideas is often relegated to a specialized team known as the product management group. Such teams are often also responsible for finding ways to Boost existing offerings. Jira Product Discovery, the new application Atlassian debuted today, is designed to ease product management professionals’ work.

Jira Product Discovery makes it possible to organize new offering and feature ideas in a centralized list for easy access. The list uses a spreadsheet-style format. Each row of the spreadsheet contains a brief summary of a product or feature idea, the benefit it could provide to customers and related details.

A product management team can prioritize product suggestions by assigning them a score ranging from 0 to 100. By prioritizing software improvement ideas, teams can more easily ensure that the most impactful improvements are implemented first. For added measure, Jira Product Discovery also displays the estimated number of users who would benefit from each feature.

Clicking on a feature suggestion in the Jira Product Discovery interface brings up more detailed information. According to Atlassian, users can access data on how many customers have requested a feature. The entry for a given product suggestion can also contain other details, such as what outstanding tasks should be completed before the suggestion is implemented.

Jira Product Discovery is integrated with Jira Software, Atlassian’s task tracking application for developers. According to Atlassian, the integration makes it possible to send feature suggestions directly to the to-do list of a company’s development team.

Jira Product Discovery made its debut today alongside two other product updates.

Many companies use Jira Software alongside Jira Work Management, another Atlassian application that likewise  provides task tracking features but focuses primarily on business users rather than developers. Today, the company announced that it will make Jira Work Management available for free with every Jira Software license through March 2024. Additionally, Atlassian rolled out a collection of templates designed to help customers more easily configure its products.

Atlassian’s applications are used by more than 200,000 organizations worldwide. Continued demand for its software helped the company grow revenues 27% year-over-year, to $872.7 million, last quarter. It projects that its sales will increase to between $890 million and $910 million in the current quarter.

Image: Atlassian

New Capabilities Further Expand the Zscaler Zero Trust Exchange™Data Protection Set of Services Enabling Enterprises to Protect Data Being Accessed Through Third-Party Applications and Integrations

SAN JOSE, Calif., Feb. 14, 2023 (GLOBE NEWSWIRE) -- Zscaler, Inc. . (NASDAQ: ZS), the leader in cloud security, today announced the intent to acquire Canonic Security, a SaaS application security platform innovator. Canonic’s platform is designed to prevent organizations' growing risks of SaaS supply chain attacks. With the massive migration to the cloud, as organizations are adopting hundreds of SaaS platforms, their users are connecting thousands of third-party applications and browser extensions to their critical SaaS platforms like Atlassian Suite, Microsoft 365, Salesforce, Google Workspace, and Slack without IT’s permission. Corporate IT believes its critical data assets are stored and protected in enterprise-ready SaaS platforms. In reality, these assets are held in third-party drives, email clients, and chatbots, bringing data exposure and cyber risk to their SaaS supply chain. Canonic’s solution allows cybersecurity and IT teams to quickly gain visibility to this ungoverned surface area and streamline SaaS application governance and enforcement.

By integrating the new supply chain security capabilities into its data protection services, Zscaler strengthens its CASB (Cloud Access Security Broker) and SSPM (SaaS Security Posture Management) offerings enabling companies to consolidate point products reducing cost, and simplifying management. This new capability builds upon the company’s recently announced industry-first, zero configuration data protection solution, and Zscaler’s commitment to data protection wherever the data resides.

“When I speak with the top global CIOs, they consistently express their challenges with efficiently securing supply chain logistics due to the massive blind spot in SaaS-to-SaaS communications. While protecting SaaS platforms is necessary with CASB and SSPM, enterprises must reduce the supply chain attack surface, detect SaaS-native threats and automate responses,” said Jay Chaudhry, CEO, chairman and founder, Zscaler. “The addition of Canonic augments our CASB and SSPM capabilities and further strengthens the growing set of services on the Zscaler Zero Trust Exchange, the world’s largest cloud security platform, and provides our customers with unprecedented visibility and security of their SaaS applications. I am pleased to welcome the Canonic team to the Zscaler family as we execute on our vision to advance SaaS security.”

Story continues

“While the SaaS ecosystem continues to grow, traditional CASB and SSPM solutions fall short to secure against the massive amount of supply chain attacks that are targeting organizations and their critical business applications,” said Boris Gorin, co-founder and CEO, Canonic Security. "The combination of Canonic with Zscaler’s existing inline and out-of-band CASB and SSPM offerings is an ideal technology fit that will accelerate how enterprises address SaaS-native threats and simplify operations by reducing the number of tools for SaaS security.”

According to research firm Gartner®, “SaaS remains the largest public cloud services market segment, forecasted to reach $176.6 billion in end-user spending in 2022. Gartner expects steady velocity within this segment as enterprises take multiple routes to market with SaaS.”¹ This large-scale move to the cloud has made it difficult for enterprise security operations teams to take control over their growing SaaS app estate and address exposure of their critical cloud data due to the SaaS supply chain – creating a greater attack surface for data breaches. These pain points are amplified due to the current IT skills gaps in the rapidly evolving cloud security space, resulting in an inability for IT to effectively manage the unwieldy set of settings and permissions for which they are responsible.

The addition of Canonic’s advanced SaaS security to Zscaler’s existing data protection will enable customers to:

• Monitor SaaS Security Posture: Automate continuous monitoring of potentially fatal misconfigurations and compliance violations in SaaS platforms such as Atlassian Suite, Google Workspace, Microsoft 365, Salesforce and Slack.

• Discover and Assess Third-Party Apps and Extensions: Gain full visibility over first, second and third-party apps and API integrations across the enterprise business application estate. Uncover rogue and vulnerable apps, assess each integration posture, behavior and the risk involved with its API access and browser extensions.

• Reduce Attack Surface: Quarantine suspicious apps, reduce excessive and inappropriate privileges, revoke and block access if necessary.

• Enforce Access Governance: Enable app integrations by automating app-vetting and app access recertification processes.

The transaction is expected to close following the completion of Zscaler’s fiscal second quarter subject to the satisfaction of customary closing conditions. Terms of the transaction were not disclosed.

For more information please see “A New and Critical Layer to Protect Data: SaaS Supply Chain Security” on the Zscaler blog.

________________________
_{¹ Gartner Forecasts Worldwide Public Cloud End-User Spending to Reach Nearly $500 Billion in 2022, 19 April 2022,
https://www.gartner.com/en/newsroom/press-releases/2022-04-19-gartner-forecasts-worldwide-public-cloud-end-user-spending-to-reach-nearly-500-billion-in-2022. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission.
All rights reserved.}

Forward-Looking Statements
This press release contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to our management. These forward-looking statements include the expected benefits of the acquisition to Zscaler’s product offerings and to our customers. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. A significant number of factors could cause real results to differ materially from statements made in this press release, including those factors related to our ability to successfully integrate Canonic technology into our cloud platform and our ability to retain key employees of Canonic after the acquisition.

Additional risks and uncertainties are set forth in our most latest Annual Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) on December 7, 2022, which is available on our website at ir.zscaler.com and on the SEC's website at www.sec.gov. Any forward-looking statements in this release are based on the limited information currently available to Zscaler as of the date hereof, which is subject to change, and Zscaler will not necessarily update the information, even if new information becomes available in the future.

About Zscaler

Zscaler (NASDAQ: ZS) accelerates digital transformation so customers can be more agile, efficient, resilient, and secure. The Zscaler Zero Trust Exchange protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Distributed across more than 150 data centers globally, the SSE-based Zero Trust Exchange is the world’s largest in-line cloud security platform.

Zscaler™ and the other trademarks listed at https://www.zscaler.com/legal/trademarks are either (i) registered trademarks or service marks or (ii) trademarks or service marks of Zscaler, Inc. in the United States and/or other countries. Any other trademarks are the properties of their respective owners.

Media Contact:
Pavel Radda or Natalia Wodecki
press@zscaler.com

Investor Relations Contact:
Bill Choi, CFA
ir@zscaler.com

© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Atlassian today announced that Jira Product Discovery, its tool for helping engineering and business teams prioritize and collaborate on new product ideas, is now in open beta, with general availability expected in the next three months. The company made the announcement at its Unleashed event in Berlin. Atlassian also announced that it will provide free access to Jira Work Management to all Jira Software customers until March 2024, in addition to a new set of customer-designed templates for using the entire suite of Jira products, which now include Jira Software, Jira Work Management, Jira Product Discovery and Jira Service Management.

Correction: Due to a misunderstanding, we previously said that the product was now generally available. Instead, it is now in open beta.

"Most software teams already have really good and efficient processes in place for building code, the delivery stage and the operation stage of software development. And we can really thank the widespread adoption of Agile and DevOps and, of course, the number one software development tool, Jira Software, for that. But in the discovery phase, it's a bit of a mess, it's a lack of structure, it's not clear what's going on," Megan Cook, Atlassian's head of product for its agile solutions, told me. She noted that figuring out that in many companies, when teams try to decide which new product features to build, the process can often feel like it's happening in a vacuum or that it's the loudest voice that gets to decide. Instead, those decisions should be outcome-driven -- and that's where Jira Product Discovery comes in.

Image Credits: Atlassian

Atlassian first announced this new service in 2021. Like Jira Work Management, it was incubated as part of the company's Point A program, which brings together customers and Atlassian product development teams to better understand and address their needs.

"We found that three-quarters of product managers today they struggled to determine the true value of their product for their customers, and we really wanted to help with that," said Cook. "They tend to use things like spreadsheets, mental notes, backlog -- a lot of them told me about using email, you can imagine how terrible that would be. They're totally disconnected from where software is planned, tracked and built. And then because it's spread out like this, there ends up being no single location for this discovery phase."

Story continues

Image Credits: Atlassian

The idea here is to help teams capture ideas and feedback, provide them with tools to prioritize these ideas and engage with stakeholders to get these into the development pipeline. There is also a browser extension that makes it easier for users to bring in user feedback from across the web and, unsurprisingly, there is a deep integration with Jira Software to help teams keep their product plans in sync.

In practice, this means users will get tools to vote for ideas, talk about them and rate them according to their risk, impact, effort and other metrics. Jira Product Discovery also features a number of visualizations that can then help teams better understand the trade-offs between the impact of a given choice and the effort it'll take to build a given feature, for example.

Image Credits: Atlassian

As for the free access to Jira Work Management for the next year, which until the launch of Product Discovery was the latest Jira version in Atlassian's stable, the company noted that about 43,000 Atlassian customer already use Jira Software and Jira Work Management together.

"We've seen a lot of the benefits that having those teams working really well side-by-side can have," Cook explained. "We know that this is a touch economic climate and it's great just to be able to deliver back and spread those practices to our customers."

Lastly, the new customer-designed Jira templates may not, at first, sound like a big deal, but they do look like an interesting way for Atlassian to get potential Jira customers to understand the overall value proposition of the entire Jira suite. Some of the companies that have put their names on these are UserTesting, Lumen and Code.org.