The Atlassian story is really a stock market horror movie with a plot twist at the end.
Atlassian makes Jira and Confluence, tools that millions of companies use to organize projects and track work. Its stock lost two thirds of its value between mid-2025 and the end of March last year. That drop took the price from over 200 dollars a share down to about 68 dollars, and the reason was not bad sales, it was fear.
Investors had convinced themselves that AI coding tools were about to let companies build their own replacement software instead of paying for tools like Jira. Why pay a subscription every month when an AI agent can write you a custom tracking tool for free? That fear, sometimes called the SaaSpocalypse, spread across the software industry and dragged down other companies too, including IBM, ServiceNow, and Adobe.
Then Atlassian reported its actual results last August, and the story flipped. Revenue grew 28 percent from the year before, and the part of its business that runs in the cloud grew even faster. The stock jumped more than 30 percent in a single day and kept climbing, nearly tripling off its low within weeks.
The detail that matters most for anyone buying software is what happened with Atlassian's AI assistant, called Rovo. More than 80 percent of the largest companies in the world now use it, and customers who use Atlassian's AI features do not buy less software, they buy more. They finish more tasks, create more documents, and grow their spending roughly twice as fast as customers who ignore the AI tools.
The fear was that AI would let people skip the software. What actually happened is that AI made the software more useful, so people used more of it.
This does not mean every software company is safe. Atlassian's own CEO cut a tenth of the company's staff last March, about 1,600 jobs in total, to redirect money toward AI investment and away from roles the business no longer needed. Cloudflare cut a fifth of its staff around the same time, and Block cut nearly half its workforce a month earlier.
The pattern across the industry is that AI is not deleting companies, but it is reshuffling who works inside them. The useful way to think about your own vendors, and your own job, is to ask whether the work is limited by how much comes in, or by how much creativity goes out. Legal reviews, compliance checks, and basic customer service are limited by volume, and AI shrinks the staff needed there fast.
Sales, design, and product work are limited by ideas, and AI tends to make those teams produce more rather than need fewer people. Before assuming any software category is about to be replaced by AI, look at whether a vendor's customers are using AI features to do more work inside that tool, or to escape it. Atlassian's numbers say people are staying and spending more, and that will not be true everywhere.