Interesting to look at their pricing for jira vs fogbugz - Clearly each of their pricing (for anything but the smallest companies) is almost the same - basically they discount the software and profit off the maintenance contracts):

Fog Creek: $10,000 + $5000/year Atlassian: $8,000 + $4000/year

http://fogcreek.com/FogBugz/PriceList.html http://www.atlassian.com/software/jira/licensing.jsp

But, Atlassian is smart, and gets you when you are small:

  50 Person Software Shop:
  Atlassian: $2200 + $1100/year
  FogCreek: $8000 + $1825/year

And, what if you are a small startup - Where FogCreek/Atlassian were 2 Years after they were founded,

  10 Person Software Shop:
  Atlassian: $10
  FogCreek: $1899 + $365/year.

Given that the products are _roughly_ equivalent, and the customer has decided for some reason not to just use Bugzilla or Trac , which product do you think your typical 10 Person Small Software Shop will install.

Or, if you are using Bugzilla, but you are a cranky release engineer, and you want to replace it with something with a little more horsepower (not to mention benefiting from the QA/Regression of all those customers of Atlassian/FogCreek) - which product do you think you might be able to get away with expensing.

Now, finally - You have grown from 7 engineers to 20 Engineers - there is a CLOSE TO ZERO chance that you will EVER switch from FogBugz to Jira (Or Vice Versa) - But, Jira is starting out with a lot more customers, so they experience a profit wave.

Basically by the time the companies grow to 100 Users (where FogCreek/Atlassian are making profits off of the Maintenance, as it's been 3+ years since anyone has called for support) - Atlassian has a much bigger slice of the pie. This does NOT bode well for fogcreek in the coming years, as all of that Atlassian market share finally starts to pay dividends, further accelerating their growth, allowing them to invest more in their product, and further gaining market share...

And that, is one major reason why Atlassian is growing faster, and eating Joel's lunch.

Ironic, given the essays that Joel has written on pricing. I realize that he probably doesn't want to price his product at $10 and make it sound "cheap" - Atlassian was brilliant, and they did the following:

"Get started for $10 All proceeds go to charity" - "www.roomtoread.org" - it's like they READ Joel's article and said to themselves "Well, we can't cheapen our product to gain market share, but we _can_ raise money for charity"