Salesforce Edges Out Atlassian in Cloud Software Battle
Atlassian and Salesforce are two leading enterprise cloud software companies that help large organizations modernize operations, automate workflows, and manage critical business processes. While both benefit from long-term digital transformation trends, their business momentum and execution profiles differ.
Atlassian is seeing higher AI adoption drive customer expansion, with revenues rising 28% year-over-year in the fourth quarter of fiscal 2026, while cloud revenues grew 31%. The company's RPO increased 44%, and subscription ARR grew 23%. Management said customers are signing larger deals, adding more seats, and using more Atlassian products as they adopt AI.
Rovo is playing a significant role in this trend, with over 80% of Fortune 500 companies now using it. Rovo-assisted actions increased 50% sequentially in the fourth quarter. Atlassian said customers using Rovo are growing their ARR at more than twice the rate of non-adopters.
However, Atlassian's long-term AI strategy requires significant upfront investment, which may continue to weigh on GAAP profitability despite strong revenue growth. The company expects a 6.5% GAAP operating margin in the first quarter of fiscal 2027 and 4.5% for fiscal 2027 compared with a 12% GAAP operating margin in the fourth quarter of fiscal 2026.
Salesforce, on the other hand, is seeing strong adoption of its AI products, particularly Agentforce. The platform's ARR exceeded $1 billion in the first quarter of fiscal 2027, making it one of Salesforce's fastest-growing businesses. Customer expansion remains another important driver, with about 50% of Agentforce and Data 360 bookings coming from existing customers.
CRM has a steady earnings growth outlook compared to TEAM. The Zacks Consensus Estimate for CRM's fiscal 2027 EPS is pinned at $14.16, revised upward by 4 cents over the past 30 days, indicating year-over-year growth of 13.1%. In contrast, Atlassian faces near-term risks from higher AI spending, lower expected GAAP operating margins, and slower ARR growth.
Overall, Salesforce shows steadier execution, with strong adoption of its AI products and earnings estimates being revised upward. CRM's reasonable valuation offers some downside protection, giving it a clear edge over TEAM.