Jason M. Lemkin highlights Atlassian's 23% revenue growth and 44% jump in remaining performance obligations as rare bright spots in a slowing SaaS market. He warns that without clear links between rising AI spending and actual software revenue, companies risk stagnation while new AI entrants capture that spend.
We're working out where the profit stack and the revenue stack gets redistributed, as you talked about beforehand.
Maybe I've got my Atlassian numbers wrong, forgive me, but Atlassian had a pretty good quarter. I know Mike probably doesn't want to talk about this, but somehow we got down it. But Atlassian's growing 23% and RPO is up 44%, right? That's pretty good. Okay. But more importantly, and I don't want to put Mike on the seat publicly, it's accelerating. Okay. Atlassian is doing better. The problem with so many peer companies, and these are the best founder-led companies, almost all the public SaaS and B2B are founder-led, right? Very few are— is there not? They're not. They're still decelerating. And how long do you get? And my— the LLMs are open to everybody. You had a year, you know, Claude 3.5, 3.7 were really good. Like you've had 7 months since then. Do you get 12 months? Do you get 18 months? Like, how long do we give you to recapture some growth and some revenue from the AI revolution? Because It's— Atlassian's got this layer, but it's also got growth. If you, if you spent the last year with 50,000 engineers building all this, this great stuff, and now your growth is in the teens, maybe heading down to 10%, I mean, better CEOs than me, but that's the one where, Rory, I think you should tell your LPs you're worried. And it's more the public folks have seen no reacceleration than have. More of them have seen persistent deceleration go, and we're going to see more this quarter. And I wish it wasn't the case. My life would be better if it wasn't. My life would be better if SaaS was on autopilot like it was through 2022. But you got to show me the money in 2026. At some point, all that, all that infrastructure spend goes to inference, has to go to software. Like it's got to go down and you've got to show, you've got to show a connection to that spend or you may not have a reason to exist.
And presumably, if you look at history, some of that goes to new companies that arrive, right?
You nailed it. I was actually— you're exactly right, is that the problem with looking at the overall SaaS growth rate now is we haven't had any good ones to the top of the funnel.
