(Bloomberg) -- Atlassian Corp. announced a shift in the way it packages and sells software to introduce tiers for the first time, in an effort to generate more revenue from large corporate clients.
Customers will be able to buy premium versions of Atlassian’s various products for work flow and development and operations, the Sydney-based company said Thursday in a statement. Premium versions of Jira and Confluence programs are about double the price of the standard products currently on sale, which will continue to be offered, but the company will offer discounts depending on a client’s number of users. Free plans will be offered for small teams and educational and non-profit organizations can receive discounted rates.
Atlassian has helped to pioneer a no-frills model for selling software that emphasized simplicity. For years, the company didn’t have a sales organization. Even now, Atlassian describes its sales team more as “advocates” meant to answer client questions than traditional representatives.
The company generated more than $1 billion in annual revenue for the first time when it reported $1.21 billion for the fiscal year ended June 30. Analysts estimate sales growth will decline to 28% in FY 2020 from 38% this year.
With the new tier model, Atlassian will look more like a conventional software company. The new pricing system could help increase revenue from the large organizations that have been adopting Atlassian’s software in greater numbers. The premium products will offer customers greater data control and security and the company will continue to add more premium features with time.
“Ninety percent of new customers at Atlassian begin their relationship with Atlassian with a cloud product,” Jay Simons, the company’s president, said in an interview. “As that’s increased, we’ve heard more requests for the types of platform and capability that larger enterprise customers want to see. The driver is just letting customers pick and choose what they want out of the product.”