Atlassian Corp. Plc. and Slack Technologies Inc. are joining forces in order to take on the might of Microsoft Corp. in collaboration software.

The companies today announced a deal that will see Slack acquire Atlassian’s Hipchat and Stride platforms. Atlassian will then help to migrate users of those two platforms to Slack.

The deal entails Slack buying the intellectual property behind the two products, which will both be shut down in the next few months. The companies will also work on future integrations, they said.

Atlassian will also make a small investment in Slack in return for a stake in its ownership, with Slack paying an undisclosed price to acquire Hipchat and Strides’ users.

The new partnership is timely, because both companies are facing pressure from Microsoft and its Teams product that it’s pitching at users of its Office 365 productivity software. Microsoft recently stepped up its efforts to attract new users with the launch of a free version of Teams, matching the strategy of Slack, which offers free and paid tiers of its own platform.

As it happens, Facebook Inc. also made a play in team collaboration today, supplementing its Workplace service by buying Redkix Inc.

Atlassian’s vice president of product Joff Rodburn said of the deal: “This strategic partnership between us reinforces our commitment to interoperability and a customer-first philosophy. We believe this partnership is the best way to advance our mission to unleash the potential of every team. And it’ll allow us to improve our focus in other areas, including expanding our offerings for technical and IT teams.”

Slack’s founder and chief executive officer Stewart Butterfield chimed in with his own thoughts on Twitter:

… • Atlassian is making a small but symbolically important investment in Slack • We’re committing teams on both sides to create deeper and more powerful integrations between Slack and the Atlassian family of products — there’s so much to do here!

— Stewart Butterfield (@stewart) July 26, 2018

Unlike Slack, Atlassian does more than just collaboration. The software company offers development tools such as Bitbucket, Jira and Trello, which are used by developers to manage their code and development processes.

Hipchat is Atlassian’s older collaboration tool, while Stride is described as a unified team communications service that was launched in 2017 with the aim of replacing Hipchat. Stride added new services including audio and video conferencing and project tracking in addition to the standard chat features found in Hipchat, but the platform was seemingly unable to get the kind of traction its rivals have enjoyed.

Atlassian said the partnership would entail closer integration between its Bitbucket, Jira and Trello services with Slack. Hipchat and Stride users will be able to continue using those platforms until February, at which point they’ll be encouraged to migrate over to Slack, the companies said.

Constellation Research Inc. Vice president and Principal Analyst Alan Lepofsky told SiliconANGLE that Atlassian had tried to add new collaboration features for its user base with Stride, but was ultimately too late because a majority of them were already invested in the Slack ecosystem.

“While Stride was a very solid product, it appears adoption was not strong enough for Atlassian to continue, so instead they are conceding this business to Slack, allowing them to remain focused on Jira, Confluence, BitBucket and Trello,” Lepofsky said. “Combined BitBucket and Slack can provide an alternative to Microsoft Teams and Github, which Microsoft recently acquired. I expect to see Atlassian and Slack also focus on Trello integration, providing competition for Microsoft Teams and Planner.”

News of the partnership came before Atlassian’s fiscal fourth-quarter earnings report. Beating expectations, the company posted a net loss of $25.9 million, or 11 cents per share, on $243.8 million in revenue. It also reported earnings before certain costs such as stock compensation of 13 cents per share. Wall Street had forecast earnings before certain costs of 12 cents per share on $233.4 million in revenue.

Atlassian’s stock was up a hefty 15 percent in after-hours trading.

Image: Atlassian/Slack