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Slack buys Hipchat with plans to shut it down and migrate users to its chat service

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Slack made a surprise announcement today that it’s acquired Hipchat, once a primary competitor to its workplace chat service, from enterprise software giant Atlassian. As part of the partnership between Slack and Atlassian, Hipchat will be shutting down and the two companies will work together to migrate all of its users over to Slack. The same goes for Stride, the chat and collaboration successor to Hipchat that Atlassian launched last year.

Atlassian clarified that Slack is only buying the intellectual property behind the two products, and that the two companies will be working on future integrations together.

In exchange, Atlassian gets a small stake in the startup, while Slack pays an undisclosed amount over the next three years to fully acquire the HipChat and Stride user bases. The partnership comes at a pivotal time for corporate chat software, with Microsoft ramping up competition with a rival product called Teams that’s immediately available for 135 million Office cloud subscribers. There’s even a free version of Teams available made to lure new users in, a strategy similar to Slack’s. Facebook too has its own take on the product, called Workplace.

Prior to this partnership, Atlassian attempted to stay competitive in the corporate chat space by moving its HipChat customers to a new team product, which it called Stride. That service offered audio/video conferencing and project-tracking alongside standard chat and other communication features. Unfortunately, like Hipchat, Stride failed to gain the traction required to keep it profitable, especially as big corporate names like Microsoft entered the enterprise chat space.

As for existing HipChat users, they’ll have the option to use the service until February, at which point they’ll be encouraged to transition over to Slack. To date, Microsoft claims 200,000 organizations use Teams, while Slack claims 500,000 active organizations.

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