September 30, 2025
Atlassian has made its biggest purchase ever, buying developer productivity company DX for $1 billion.
This deal shows how valuable companies that help measure developer productivity have become, especially as businesses spend more money on AI tools for coding and software development.
The Australian software giant, known for tools like Jira and Confluence used by over 300,000 companies worldwide, is betting big on the future of AI-powered software development.
DX helps companies figure out if their development teams are working efficiently and whether their AI investments are actually helping developers build better software faster.
This purchase puts Atlassian in direct competition with tech giants like Microsoft's GitHub and other developer tool companies.
It also shows how much the software industry values companies that can measure and improve how developers work, especially as AI becomes more important in writing code.
Let’s dive in to know more:
Companies are spending huge amounts of money on AI tools for their development teams. These tools promise to help programmers write code faster and with fewer bugs. But there's a big problem: most companies don't know if these expensive AI tools are actually working.
Many businesses are spending 300-400% more on AI development tools compared to their old software tools. That's a lot of money, and company leaders want proof that it's worth it.
They need answers to simple questions like: "Are our developers actually more productive with AI tools?" and "Should we buy more AI software or different ones?"
This is exactly what DX helps with. The company's software watches how development teams work and gives clear data about what's helping and what's not. It's like having a fitness tracker, but for software development teams.
Mike Cannon-Brookes, who started Atlassian, explained the problem: "You suddenly have these budgets that are going up. Is that a good thing? Is that not a good thing? Am I spending the money in the right ways?"
DX was started five years ago by Abi Noda and Greyson Junggren in Salt Lake City. Noda used to work at GitHub and got frustrated because he couldn't get good information about why development teams were struggling.
"The things we thought would help teams ship products faster were quite different than what the teams and developers were saying was getting in their way," Noda said about starting the company.
DX built a platform that does two important things:
By combining these two types of information, DX can tell company leaders exactly where their development process is broken and what they should fix first.
The company has grown incredibly fast. Since 2022, DX has tripled the number of customers every year.
Now they work with more than 350 big companies, including well-known names like Pfizer, Pinterest, and Dropbox. What's impressive is that they did this while raising less than $5 million from investors - much less than most tech startups need.
One reason this deal makes sense is that most of DX's customers already use Atlassian's tools. About 90% of companies that use DX also use Jira, Confluence, or other Atlassian products to manage their projects.
"DX has done an amazing job understanding both the numbers and feelings about developer productivity and turning that into actions that can improve companies," Cannon-Brookes said.
For Atlassian, this means they can offer their existing customers a complete solution. Instead of just helping teams track projects, they can now help measure if those projects are being completed efficiently.
Noda agrees that the two companies work well together: "We can provide customers with the complete picture - the data to understand where problems exist, and then they can use Atlassian's tools to fix those problems."
This purchase creates a big advantage for Atlassian over its competitors. They will be the first major company to offer project management, team collaboration, and developer productivity measurement all in one place.
Microsoft is probably the biggest competitor. They have GitHub for code storage, Azure DevOps for project management, and Teams for communication. But they don't have anything like DX that measures how well development teams are actually performing.
Other project management companies like Asana and Monday.com focus on general business teams, not specifically on developers. They also don't have tools to measure productivity.
Smaller developer tool companies like Linear will now compete against a much bigger, well-funded competitor. Atlassian has much more money to improve their tools and attract customers.
This DX purchase is part of a bigger plan by Atlassian. The company wants to create what they call a "System of Work" - a connected set of tools that helps all kinds of teams work better together.
At their recent Team '25 conference, Atlassian showed how they want to connect business teams with technology teams. The idea is that when these groups work together better, companies can create new products and services faster.
By adding DX to tools like Jira (for tracking projects), Bitbucket (for storing code), and Compass (for managing services), Atlassian is building a complete platform for software development.
Right now, companies are buying lots of AI tools for their developers:
But most companies can't tell if these tools are actually helping. They're spending millions of dollars without knowing if developers are becoming more productive.
DX solves this by tracking:
This information helps companies decide which AI tools to keep buying and which ones to stop using.
For Developers: The combination of Atlassian and DX should make their work smoother. Instead of dealing with lots of different tools that don't talk to each other, they'll have one integrated system. The productivity measurement won't feel like surveillance - it's designed to identify and remove the frustrating parts of their job.
For Engineering Managers: They'll get clear data about how their teams are performing and where to focus their attention. Instead of guessing what's wrong, they'll have specific information about bottlenecks and problems.
For Company Executives: They'll finally have proof of whether their expensive AI investments are working. They can make smarter decisions about which tools to buy and how to organize their development teams.
For Customers: Companies that use both Atlassian and DX tools will get better software products delivered faster, because the development teams will be working more efficiently.
The $1 billion price tag sends a strong message to the entire tech industry. It shows that tools for measuring developer productivity are no longer nice extras - they're essential for modern companies.
This validates what many experts have been saying: as software becomes more important to every business, the ability to measure and improve how software gets built becomes critical.
Other companies will likely try to copy this approach, either by building their own measurement tools or by buying existing companies. We might see more acquisitions in this space soon.
DX's growth has been impressive:
Atlassian's scale provides context for why this deal works:
Atlassian plans to integrate DX's features into their existing products over the coming months. Customers who already use both companies' tools should see immediate benefits as the integration improves.
The company will likely use this acquisition to attract new customers who want the combined capabilities. They may also develop new features that only work when all the tools are used together.
For the broader market, this deal sets a new standard for how much developer productivity tools are worth. Other companies in this space might see their valuations increase, and more investment money will likely flow into similar tools.
While this acquisition looks promising, there are some potential challenges:
This acquisition is part of a larger trend in the tech industry. As AI becomes more common in software development, companies need better ways to measure its impact. The traditional ways of tracking developer productivity don't work well with AI tools.
Companies are also realizing that developer productivity directly affects their competitiveness. Businesses that can build software faster and with higher quality have major advantages over their competitors.
This is especially important as more companies become "software companies" - even traditional businesses like banks, retailers, and manufacturers now depend heavily on custom software.
The DX acquisition is actually Atlassian's second major purchase this month. Earlier in September, they bought The Browser Company, which makes AI-powered web browsers. This shows that Atlassian is moving quickly to add AI-related capabilities across their product line.
These back-to-back acquisitions suggest that Atlassian sees a major opportunity in AI-powered work tools and wants to establish a leading position before competitors catch up.
Atlassian's $1 billion purchase of DX represents a major shift in how companies think about software development. It shows that measuring developer productivity is no longer optional - it's essential for success in an AI-driven world.
This deal positions Atlassian as the leader in comprehensive developer productivity platforms, combining project management, collaboration, and performance measurement in one system.
For the hundreds of thousands of development teams using Atlassian's tools, this could mean significantly better insights into how they work and clearer paths to improvement.
The acquisition validates the growing importance of developer productivity measurement and sets up intense competition with Microsoft, GitHub, and other major players.
As AI continues to reshape software development, companies like Atlassian that can help measure and optimize its impact will likely see continued success and growth in this rapidly evolving market.
Q1: What exactly does DX do that's worth $1 billion?
DX helps companies measure how productive their software development teams are, especially when using expensive AI tools.
It combines data about code quality, project completion speed, and developer satisfaction to show leaders what's working and what isn't.
With companies spending hundreds of millions on AI development tools, this measurement capability has become extremely valuable.
Q2: How will this affect existing Atlassian customers?
Current Atlassian users should benefit from better integration between project management (Jira) and developer productivity insights (DX).
Instead of using separate tools that don't communicate, they'll get a unified view of both project progress and team performance. The integration will roll out gradually over the coming months.
Q3: Why is measuring AI impact on developers so important right now?
Companies are spending 300-400% more on AI development tools compared to traditional software, but most can't tell if these tools actually help developers work faster or better.
DX provides the missing measurement layer to prove whether AI investments are worthwhile and guide future spending decisions.
Q4: How does this change competition with Microsoft and GitHub?
Atlassian now offers something Microsoft doesn't have - integrated developer productivity measurement alongside project management.
While Microsoft has GitHub for code and Azure DevOps for projects, they lack DX's capability to measure actual team performance and AI tool effectiveness, giving Atlassian a competitive advantage.
Q5: Will this acquisition affect DX's pricing or availability?
Atlassian hasn't announced specific pricing changes, but typically acquisitions like this lead to bundled pricing options for customers who want both companies' tools.
DX will likely remain available as a standalone product while also being integrated into Atlassian's broader platform offerings.
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