The Australian software company predicts that its on-prem services will grow faster than their cloud counterparts. However, that is not what the company itself wants.

Like many companies, Atlassian reported its financial results this week. It’s not the current numbers, but the forecasts for the future that stand out. Atlassian expects licensing revenue for its on-prem software to grow by more than 30 percent, compared to 30 percent growth for its cloud services.

These predictions are startling for several reasons, not just because the cloud is growing much faster than on-prem software in most IT markets. The trend doesn’t sit well with Atlassian itself. The company would prefer its customers move to the cloud, but many stick with its on-prem products.

On-site or in the cloud?

Atlassian announced last month that it would discontinue its on-prem server services starting February 2024. Customers using this have two options: either move to the cloud or purchase additional credits for the on-prem database. So it seems that the second option is preferred. The Register spoke to a few customers and the main reason for staying on-premises is the limited on-premises support Atlassian offers in the cloud.

But there are also reasons to choose Atlassian’s cloud services. Two recently discovered flaws in Atlassian Confluence could put on-prem customers’ data at risk, while cloud customers have less to worry about. Sometimes Atlassian itself makes mistakes when it comes to securing its software.

The cloud doesn’t always come first

The Atlassian example once again shows that IT companies sometimes dare to overestimate the willingness of their on-prem customers to switch to the cloud. SAP, to name just another example, also has to fight to migrate its customers. First the cloud is no longer the norm: companies prefer to opt for a hybrid approach where they keep certain systems on-premises.