Back in November 2010, I posted about how Atlassian counts customers. We’ve had a few changes since then, so it’s probably worth providing an update on this topic…

The reason for providing the exact definition of how we count customers is to be Open and Honest with you — our customers and prospective customers. If we are going to claim to have a certain number of customers, it’s only right to explain how that count is determined.

Our latest definition for counting customers is:

  • The number of companies
  • Who have currently active licenses or subscriptions
  • For which they paid money
  • Excluding our starter-level licenses and subscriptions

The current count as at 24-May-2012 is 20,113 customers in 129 countries.

“But wait!” you say. “That’s less than you said in 2010. How can that be?”

Well, the reason is that we’ve decided to be even more conservative, especially with our increased focus on our OnDemand service. The biggest change is that we now only count companies with ‘currently active’ licenses or subscriptions, which means they’ve paid us some money in the past 12 months. Our prior definition included customers who had purchased our software but were not necessarily paying for maintenance. We’ve now decided to exclude them from the count — even though we know that many such customers are still using our software!

It’s also worth giving a more detailed explanation of the above criteria:

The number of companies is calculated by counting the number of email domains of our customers. We don’t have any sales people dividing up the world into sales territories by industry — we just have public price lists and a self-service sales process. So, it’s not easy for us to know who works for which company. That’s why we use the email domain to identify companies. For example, we would assume that ‘john@acme.com’ and ‘wendy@acme.com’ belong to the same company.

Currently active licences means that the company has at least one license paid-up into the future to receive support and maintenance. When we sell a ‘downloadable’ product, customers receive a perpetual license, which means they can use the software forever. However, if they want to receive support and access to newer versions, we ask them to pay a yearly fee. When we sell an OnDemand (‘Hosted’) subscription, the cost of Support and Maintenance is built into the subscription price. Therefore, we only count OnDemand subscriptions if they are currently paying for our service.

Paid licenses are included in the count, but we don’t count licenses that we’ve given away for free, such as licenses to community groups, open-source projects and classrooms. While they’re definitely users of our software, we haven’t received any money so we don’t include them in our customer count.

We exclude ‘Starter’ licenses which are our $10 for 10-user licenses (where all proceeds go to the Room to Read charity — over $1m raised so far!). We also exclude ‘entry-level’ subscriptions to our OnDemand service where customers pay just $10/month — this money doesn’t go to charity, but they’re still being excluded because we think many such subscribers are still ‘testing our service’ and haven’t yet committed to Atlassian in a full production environment.

You’ll notice that all these criteria take the most conservative possible definition, so that we can stand 100% behind the customer numbers that we publish.