Hi, I’m Björn, Co-CEO of Resolution. First of all, I want to thank Atlassian for sharing these insights and also express my gratitude to all the partners who have provided their comments. In addition to our detailed thoughts, it would be very interesting to understand the specific objectives behind each of these individual pricing models from Atlassian's perspective. It would also be helpful to see a clear plan on how these models are intended to work together within the larger Marketplace ecosystem—across Solution Partners, customers, and Marketplace Partners—alongside their respective licenses. There must be some underlying vision for how these models should function in practice, but unfortunately, that isn't fully clear from the posts so far.
Effects for Customers:
Many of the challenges that arise from the proposed changes will heavily impact customers, and this cannot be understated. While new pricing models like multi-instance or user-based licensing may seem beneficial at first glance, they introduce a high level of complexity that will be difficult for customers to manage, navigate, and understand.
- Multi-instance licensing and user-based licensing offer customers the opportunity to pay only for what they use, which is theoretically advantageous. However, managing multiple licensing models at once will make it very hard for customers to keep track of their actual costs, especially when different pricing structures run in parallel.
- Multi-instance licensing seems fair and reasonable, as it will relieve customers from having to purchase separate licenses for each instance, aligning better with their real needs
- Costs will become significantly more complicated with usage-based and user-based models. Customers will struggle to predict their costs, which is especially problematic for large enterprises working with strict budgets. This unpredictability could lead to mistrust in the Marketplace, making customers hesitant to adopt new models.
- Budget management will also become more difficult and less transparent. With multiple pricing models that vary depending on the app or use case, it will be challenging for customers to forecast their annual or monthly expenditures, which could be a major deterrent for many businesses.
Effects for Solution Partners:
Atlassian Solution Partners, who sell both Atlassian licenses and Marketplace apps to customers, will face significant challenges. They are caught between managing the complexity of both Atlassian’s licensing models and the Marketplace licenses, which follow different pricing structures.
- Solution Partners will feel the brunt of the customer challenges, as they serve as the interface between the customer and Atlassian. They will bear the responsibility when customers struggle to understand the various licensing models and their costs.
- The administrative burden for Solution Partners will increase dramatically, especially when it comes to offering quotes. It will be difficult for them to provide accurate pricing if they cannot predict the exact costs that will eventually be passed on to the customer, particularly in the case of User-based pricing, and usage-based pricing.
- Billing will become more complex, with both fixed and dynamic pricing models in play. Solution Partners must ensure that customers understand this complexity while managing timely and accurate billing on their end.
- Furthermore, there is a discrepancy between Atlassian licenses and Marketplace licenses. The different pricing models and licensing strategies between the two make it harder for Solution Partners to provide a cohesive and transparent offering to customers.
Effects for Atlassian:
Atlassian will be at the center of this complexity. One of the biggest challenges will be making these changes transparent and manageable for customers and partners alike. Here are some critical areas that Atlassian will need to address:
- Atlassian will need to significantly enhance its admin interfaces for customers, Solution Partners, and Marketplace partners. Transparency around license management, usage quotas, and costs has not historically been Atlassian's strength, and this added complexity could quickly become overwhelming.
- To manage these new licensing models, robust monitoring and reporting functionalities are necessary. Customers and partners need clear visibility into how many users are licensed, how usage is evolving, and how this impacts costs.
- Atlassian must also ensure that these new pricing models are aligned with existing Atlassian licenses. If the pricing for Marketplace apps is structured differently from that of Atlassian’s core licenses, it could lead to confusion and frustration among customers.
Effects for Marketplace Partners:
For Marketplace partners, these changes will introduce significant costs, both financial and operational. Adapting to the new pricing models will require considerable investment and organizational changes.
- Managing user-based or usage-based pricing will require substantial analytics and infrastructure, which most partners currently do not have in place. These new pricing models will demand detailed monitoring and reporting, making it harder to track customer usage, costs, and revenue.
- Currently, Marketplace partners do not have direct access to users, which makes successful customer success programs difficult. Since Atlassian does not allow direct communication with users, partners will struggle to implement user-based models effectively.
- Without access to customers, Marketplace partners will also find it harder to drive adoption and growth for their apps, as they have limited ability to reach users or promote within the app.
- Administrative costs for Marketplace partners will increase, as they will need to allocate more resources toward managing pricing models. This includes investments in analytics, customer success, and sales to maintain the same revenue levels as before.
When looking at the specific licensing models, multi-instance licensing, as described, seems generally beneficial, especially when combined with the existing licensing model. This approach could simplify things for enterprise customers while maintaining consistency. However, user-based licensing introduces unnecessary complexity. The core question remains: What exactly is a "user"? For many apps, users may be the ones creating scripts or rules, but the benefits of those actions are often experienced by all users across various screens. Similarly, in reporting apps, is the user the one creating the report, or are all users who view and consume the report considered users? While every Marketplace vendor could theoretically define their own "user," this lack of standardization would lead to confusion and frustration among customers, who would have to navigate differing definitions of what constitutes a user from app to app. The result is a chaotic environment where customers are unsure whether they need to license individual users for one app but not for another. This model, with so many divergent interpretations, risks becoming unmanageable and causing dissatisfaction across the board.
Regarding JSM decoupled from Jira, this model makes sense in theory, but raises the question of whether it ties directly into per-agent pricing. While per-agent pricing is logical, the issue remains around apps that function in both Jira and JSM environments. How does the customer choose which licensing model applies? Once again, the core question of “what is a user” re-emerges. Is the user defined as the agent? Or does the term "user" extend to everyone involved? What happens when an app that functions in both Jira and JSM forces the customer to license by agent in one instance but by user in another? This situation is left unclear, and the potential for confusion remains.
Lastly, usage-based pricing only makes sense when it is combined with app editions and the existing licensing models, as currently envisioned. It should allow for a base standard license that includes a certain number of actions or features, with the option for customers to scale up to a premium tier offering more. Usage-based pricing could then come into play for handling additional needs like storage or API requests, targeting power users or customers whose usage drives up costs for the Marketplace partner. This would prevent general costs from rising for all customers and ensure that only those with high demands incur additional charges. However, as a standalone model, usage-based pricing is too unpredictable and difficult to manage. Combining it with the existing licensing framework and app editions is the only way to make it a viable option, much like how Atlassian manages its own pricing tiers.