Atlassian's Hefty Price Hikes and Inflexibility on Terms Frustrate Customers


Atlassian announced steep price hikes and new licensing in February which have taken many customers by surprise. The supplier of project management, collaboration, and dev/ops software tools had been known as the low-cost solution provider, but this might not be the case anymore. For example, one of our clients experienced a 12x cost increase on an Atlassian product renewal (after one year) when they were forced to move from Server to Data Center licenses. Another client who opted to renew just the maintenance on its Server licenses (only allowable on flat renewals) reported a whopping 35% price increase.


Atlassian uses a low-touch, tiered-pricing sales model; typically offers 1-year terms that expose customers to YoY increases; and does not budge on additional discounting. Better discounts are possible if customers purchase Atlassian products through a reseller, but even then, these are not very significant, with most discounts landing between 3% to 10% off the tiered list price.


Since Server licenses are no longer being sold, Atlassian has been providing “customer loyalty discounts” to customers making the move to Cloud licenses (customers must migrate 1,001+ users to an annual subscription) as outlined here:


  • Purchase before July 1, 2021: 55% discount

  • Purchase before July 1, 2022: 40% discount

  • Purchase before July 1, 2023: 20% discount


These discounts are intended to ease the transition from Server or Data Center to Cloud, but Atlassian’s Cloud licenses are much more expensive than Server and Data Center licenses. For example, list price for 10,000 New Jira (Server) licenses was $120,000/year and 10,000 Jira (Cloud-Enterprise) licenses is $480,262/year at the 55% customer loyalty discount. This translates to a 4x increase in annual spend when moving from Server to Cloud licenses. Also, after the purchase of Server licenses, customers only paid for maintenance come the renewal, which is about 50% of the Server license cost. Customers that are renewing maintenance will see even larger increases when moving to Cloud or Data Center licenses.

The following chart summarizes recent price hikes for Jira, one of Atlassian’s most popular products.


Price increase for Jira Software Server, Data Center, Standard, Premium, Enterprise

Atlassian increased Data Center licenses by 15% for existing customers; new customers prices will now be ranging from 15% to 140% more than the previous listed price. The heaviest increases are on Jira and Confluence – the most frequently purchased products.


The bottom line: Clients find Atlassian intractable to negotiate with regarding pricing as well as their standard terms and conditions. Its contracts do not include any price protection/renewal caps, and they are a supplier that frequently increases prices.


What Can Customers Do?


We urge clients to review their Atlassian spend immediately and determine where they risk financial exposure because of these price hikes and licensing changes. Because the vendor will not negotiate terms, clients must prepare their budget to accommodate these increases and/or start vetting alternative suppliers to move away from Atlassian. To properly examine competitive options can take months but is one of the only ways to build a leverage position with this vendor.


To learn more about identifying hidden risks in software contracts, sign up for our July 15 webinar titled Top Gotchas in an IT Contract, read our blog titled Leverage: The Key to Every Deal, or contact your ClearEdge representative.


- Corey Huerfano is a ClearEdge Analyst.