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Investing.com -- Atlassian shares rose 6% in premarket trading on Tuesday after the software maker to phase out its Data Center products over the next six years. Wall Street analysts say this could lift cloud adoption and revenue growth.
The company laid out timeline beginning March 2026, when new license sales for Data Center will end.
Existing customer licenses and app sales will wind down in 2028, with end of life in 2029 and full support ending in 2032.
Data Center accounted for $1.5 billion, or about 28% of revenue for Atlassian in fiscal 2025.
Truist said Atlassian will change how it books revenue from Data Center subscriptions, recognizing more of the contract value upfront, which could add near-term volatility but may bring upside.
“In the near term, we expect these changes to add noise to the financial model,” said Truist analyst.
It added that migrations to cloud, aided by new pricing changes and enterprise-grade features, are likely to become the main driver.
Raymond James said the decision should push more customers to the cloud and support Atlassian’s longer-term revenue growth above 20%. It noted that customer retention has been strong despite past price increases, limiting churn risk.
“While this does not directly impact Cloud revenue growth, a key metric for the stock, we assume a mid-single digit contribution from Data Center migrations, slightly below FY25, which would also appear quite conservative considering customers have an increased incentive to migrate,” analysts at Raymond James said.
Execution on cloud growth will be the key measure for investors, as per analysts on Street.