Atlassian Leads a Saturated Market for Project Management Tools
ETR Observatory for Project Management Tools
Productivity tools rapidly gained adoption due to the pandemic and ensuing remote work paradigm shift, and spending in this sector remains healthy as organizations support a hybrid workforce and increasingly shift workloads to the cloud. Amidst budget pressures, productivity and workflow management become increasingly critical with distributed workers and a heightened focus on operational efficiency across departments and roles. The suite of applications bundled into hosted platform providers like Google Workspace and Microsoft Office grab a large slice of the overall productivity pie, but when it comes to project management tools specifically, the market is saturated and neither of those two cloud players has an exclusive grip. In fact, Google Workspace doesn’t include a specific project management tool, and Microsoft Project fairs relatively poorly in our data, particularly as compared to other embedded Microsoft offerings. Atlassian is a formidable competitor noted for multiple offerings and robust features long favored among more technical roles, although concerns exist around the vendor’s pricing model and resources needed to stand the solution up. Meanwhile, lighter-weight, niche alternatives have popped up, like Smartsheet, Monday.com, Airtable, and ClickUp, albeit sometimes entering an organization through the side door. With smaller citation bases, data on these vendors exhibit volatility but some are beginning to prove themselves in the enterprise, while others, like Wrike, struggle to gain traction. In sum, the marketplace remains dynamic. Despite entrenchment, organizations are not investing heavily in Microsoft Project. Atlassian’s latest data is incredibly robust with explosive Pervasion growth and a subsector-leading Net Score. Data for Monday.com is promising, while Smartsheet has faltered. ClickUp and Airtable are starting to gain some traction in our work, while Asana, Wrike, and Workfront are struggling to catch on.
Positioning for the ETR Observatory on Project Management was determined by ETR’s two core, syndicated surveys. Full methodology and graphic explanation are available on our About the ETR Observatory page.
This ETR Observatory examines the state of project management tools by triangulating data from ETR’s Technology Spending Intentions Survey (TSIS), commentary from ETR Insights interviews with IT decision makers (ITDM) from the ETR Community, and proprietary industry analysis. TSIS data measures spending velocity on a vendor or product based on proprietary measures of Net Score and Pervasion. ETR Insights interviews provide qualitative context and vendor evaluation to complement quantitative data. The report encompasses nine project management vendors tracked within the TSIS, though given the cross-cutting nature of the space others vendors are mentioned, including those in our Emerging Technology Survey (ETS).
A Critical Need for Project Management Tools in the Enterprise
Spending on collaboration, communication, and productivity tools skyrocketed as the world adapted to a distributed workforce during the pandemic. Nearly three years later, spending in this sector has largely stabilized as the initial rush transitions to maintenance mode. IT budgets continue to face scrutiny as economic woes drag on, and unfettered SaaS adoption is now a relic of a time with more discretionary spending. The nature of collaboration, communication, and productivity investments may change as organizations adjust headcount, priorities, and seek to optimize spending. To this end, organizations are sitting down with vendors to negotiate better pricing structures as they closely audit their IT environments. According to our ITDMs, some vendors are eager to discuss early renewals and changes to terms, while others push back. Organizations will continue investing in project management tools to coordinate and manage a hybrid workforce, and workers will look towards these tools to achieve high output, enhance coordination, and enable reporting across its distributed employee base. Microsoft and Google are the two powerhouses of productivity, collaboration, and communication. Microsoft’s O365 suite, Project, and Team represent its dominance in this space (especially among large enterprises) and Google’s Workspace provides a counterpoint (especially among SMB and younger users).These two stack up against a wide berth of peers in cross-cutting sectors. ITDM commentary states organizations with enterprise agreements will push for consolidation onto a singular platform to the furthest extent possible. However, for pure-play project management tools, it is open season.
Figure 1. Atlassian’s data set in the Productivity Apps sector is the strongest among project management peers with the highest Net Score and second highest Pervasion. Monday.com takes second place and carves out a middling tier with Airtable, Smartsheet, and Asana. ClickUp, Asana and Microsoft Project, followed by Wrike are in poor health. This TSIS model (as well as others) are available on the ETR Platform.
I. Same Old Microsoft Project
Historically, larger organizations have gravitated towards Microsoft Project due to its “deeper functionality” and support at scale. It is a well-established and mature tool with a rigorous approach to project management. Utilizing ETR’s proprietary Adoption and Replacement Reasoning analysis, we see that IT Skills / Talent Availability, Product Security, Product Cost / ROI, and Product Technical Capabilities were cited as adoption drivers for Microsoft Project. However, this complexity and feature breadth can drive users away with Project’s significant learning curve and “extensive configuration and user provisioning,” according to one director of IT. Product Cost / ROI, Stack Alignment / Integrations, and Feature Breadth were the most frequent reasons for replacing Project.
Net Score for Project (3.5%) is much lower than its sector-leading counterparts Office and Teams. Clearly, Project is not the premier product of the suite. Still, it is incredibly pervasive with 629 citations, although most of the spending indications are flat. Spending data from Large organizations are similarly flat with even lower Net Scores. Midsize organizations have indicated a sequential increase in spending on Microsoft Project, but the subsample persists with no New Adoptions among Midsize respondents. This all despite commentary suggesting larger enterprise allegiance towards Project. Fortune 500 and Global 2000 survey respondents note dismal spending intentions for the product at -11.2% and -18.97% Net Scores, respectively. Small organizations data is relatively strong for Project compared to other cuts, but still low, with a Net Score of 10.8%, split in half from a stronger January 2023. Microsoft Project’s Net Score has dropped among virtually every industry vertical and regional cut.
Frustration is building around a lack of investment in the product despite rapid innovation across other key segments in Microsoft’s portfolio. One IT decision maker noted that non-licensed users trying to access Project plans quickly “becomes Excel hell.” Further, the more feature-rich desktop version is only available on Windows machines, whereas cloud-first competitors offer solutions with simple user configurations that require little IT support. These tools serve as “point solutions with minimal integration” to other enterprise applications and offer “instant business value” and more flexible pricing options.
Figure 2. Net Score + Pervasion | Year-Over-Year Change: The table above shows Net Score and Pervasion for project management vendors tracked within the APR23 TSIS, alongside the magnitude of change for each metric. Year-over-year data is unavailable for ClickUp as JAN23 marked the vendor’s TSIS debut.
II. Is Atlassian King? Devs Would Say So
Development and engineering teams have long sworn by Atlassian and its feature-rich suite. Over time, it has expanded throughout the enterprise. Atlassian has the third-highest Net Score (35.3%) across the whole Productivity Apps sector, trailing only Microsoft Teams and Office, respectively. Spending is largely stable with consistently strong Increasing intent and minimal negativity. Pervasion continues to grow explosively, now at 41.5%. Adoptions are low but stable. Atlassian’s data is even more robust among Large, Fortune 500, and Global 2000 subsamples. Midsize and Small organization show relative health in Atlassian spending, as well. IT/TelCo, Service/Consulting, and Financials/Insurance organizations are spending healthily; regional subsamples are also healthy though showing slight declines across International and EMEA customers. Proponents tout Atlassian’s ease of use; alignment with Agile DevOps; tracking and monitoring capabilities; collaboration and sharing; extensive integrations; and easy-to-use organizational knowledge base. Robust positive sentiment from ETR Community Members has followed Atlassian over time.
One drawback for Atlassian seems to be its price tag. The suite is “pretty expensive, especially when you start to roll up and find out that a lot of add-ons are not free.” Organizations deep in the suite will argue that the value justifies the cost, but those that aren’t may find that the time and investment necessary is not worth it. ITDMs noted the vendor’s somewhat aggressive push to their cloud offering. One vice president of innovation noted that his organization shrank its footprint by moving certain uses cases to Microsoft SharePoint: “We were getting a lot of pressure; Atlassian was really changing their pricing to push people to the cloud, which was fine, but it’s like, why do we want to increase our spend when we have another cloud provider? Let’s bite the bullet and move content. We did.” This may not translate to direct investment in Project, but the productivity dollars are still finding their way to Microsoft. In the most recent TSIS, Atlassian users cited Feature Breadth, Product Technical Capabilities, Stack Alignments / Integration, and Product Cost / ROI as main adoption drivers for Atlassian within the Productivity Apps sector, while Stack Alignment / Integration and Product Cost / ROI were also cited as reasons for replacement. Meanwhile, Smartsheet and Airtable both register shared Net Scores of 20 each, with the former at a much higher citation level, posing notable yet muted threats to Atlassian in ETR’s shared accounts analysis.
This doesn’t suggest a mass exodus from Atlassian. Particularly in such a climate as organizations are currently operating in, it is not uncommon to shop around. As an example, one director of IT described how uninspiring re-negotiations with Asana led to an Atlassian migration: “We said, ‘Okay, thank you, but we’ll take our data and move.’” They stood up the suite quickly with Confluence, Jira Service Management, and Jira Work Management, the latter of which poses questions about the future of Atlassian’s support for Trello: “My impression is that they are trying to make a clone of Trello. Yeah, Trello is their product, [but] they purchased it.” He thinks that Atlassian keeps Trello “separate” from the rest of the platform and senses a “definite strategy in moving some of the functionalities and concepts…into a product that is 100% their own.”
Figure 3. Spending Breakdown | Project Management Vendors | Productivity Apps Sector: The model above shows the proportional spending breakdown by citation type for project management vendors tracked in the April 2023 TSIS survey. The blue dot represents a given vendor’s Net Score within the Productivity Apps sector.
III. Smartsheet, Asana + Monday.com – Are they Enterprise-Ready?
Smartsheet is cited as an easy-to-use solution that is quick to stand up with little fuss around integrations and back-end administration. Despite steady traction in surveys over 2022, a new drop in spend velocity is present for Smartsheet, as customers indicate elevated Decreasing spend. While softened sequentially, customer expansion rates remain relatively strong for Smartsheet. Customers say it’s “simple to use and well thought-out” and great at “everyday tasks” in project management, such as adding tasks or updating statuses. It may “not do everything that a Microsoft Project does,” but it is easier to pick up. “Most folks can figure out how to use Smartsheet after a few minutes of playing around with it.” It is “not fully mature and some features are lacking, [but] it’s very easy to get started and very easy to integrate into your systems.”
Year-over-year Net Score change for Smartsheet is negative but in line with project management peers. Even with a sequential drop in spending, customers still indicate high levels of positive spending (39%). There is some year-over-year contraction in Pervasion among larger cuts like Fortune 500 and Global 2000 organizations, coupled with notable Net Scores declines sequentially for each index. Large organizations show growth in customer expansion (though not as strongly as indicated in January), while Midsize respondents indicated all-time lows in October 2022 but have since recovered to moderate health. Meanwhile, Small organizations indicated record-high spending on Smartsheet, largely driven by robust growth in customer expansion over the past year. Based on the shared accounts analysis, Smartsheet customers spend the most on Atlassian. Microsoft Project has an impressive citation overlap with Smartsheet at 64% but it does not take significant wallet share from the smaller vendor. Smartsheet’s shared Net Score is quite healthy among Project respondents, though softer year-over-year.
Shadow ITA recurring theme when discussing these smaller productivity applications is that IT departments, and CISO’s in particular, worry about ‘shadow IT,’ and SaaS project management tools are an easy area for a department (or even a single user) to independently invest in outside of a centralized IT governance plan. These vendors infiltrated organizations from multiple access points, appealing to users with freemium pipelines and free trials that make it easy for collaborators to join (the “flywheel effect”). This can lead to duplicated vendors and feature sets in different corners of an organization. Starting small, these ‘grassroots’ adoptions can slip under the radar of Finance, IT, and Security departments before emerging at a modest scale. IT intervention is needed to provide alternative solutions or to otherwise “secure, contain, and manage” the solution.
Figure 4. Top Project Management Vendors | Utilization + Mind Share | FEB22 ETS: These tables show vendors in the Project Management subsector with the top Utilization rates [Allocating Further % + Evaluated, Plan to Utilize %] and largest Mind Shares [Pervasion] based on responses from 1421 IT decision makers in ETR’s February 2023 Emerging Technology Survey.
Conclusion: Open Season for Project Management Vendors
Organizations will continue to put productivity dollars towards full enterprise suites like Microsoft and Google, even as the market slows, but they won’t be leaning on Workspace and Project, at least not exclusively, for project and workflow management tools. Microsoft Project is somewhat entrenched, but organizations are not increasing spend or indicating net-new adoptions of the tool. Atlassian, Smartsheet, and Monday.com are increasingly prevalent in the shared accounts of both major players. Data on Atlassian remains incredibly robust as its Pervasion grows, and although pricing concerns exist it is not enough to dampen the strong Net Score or keep the explosive Pervasion at bay. The future continues to look strong for Atlassian. Airtable’s data set is still relatively nascent, and citations remain low, though the vendor has the third highest Net Score among peers. Smartsheet has shown itself to be a strong contender, though its recent data set faltered, along with Asana’s data set that continues to struggle. Monday.com continues to show signs of strength in the enterprise. Data on ClickUp’s has yet to impress us, but the vendor is making strides in both the TSIS and ETS, with positive commentary from ITDMs. Beyond this, teams and users continue to adopt smaller providers as workers adapt to distributed working in an environment with high productivity expectations. Overall, the project and workflow management space will continue to mature and become increasingly critical in managing daily work. The market is dynamic and full of competitors. Strategic investments will continue, coinciding with improvements to the hybrid workspace and overall digital experience.