The decision between Atlassian on-premise (Data Center) and cloud deployment is more consequential than ever. With Atlassian Server support having ended in February 2024 and Data Center costs increasing by 30% in February 2025, organizations must carefully evaluate their options to ensure long-term success with Atlassian products like Jira Software, Confluence, and Bitbucket.
This strategic choice impacts not just your IT infrastructure but your entire organization's ability to collaborate effectively, maintain security compliance, and leverage the latest innovations in project management and development tools. Let's explore the key factors that should drive your decision-making process.
Atlassian Cloud operates as a Software-as-a-Service (SaaS) solution where Atlassian handles all hosting, maintenance, and updates on their infrastructure. This cloud-native approach eliminates the need for organizations to manage servers, perform upgrades, or maintain hardware.
Cloud Benefits:
Data Center Considerations:
For organizations with specific regulatory requirements mandating data residency or those with specialized security protocols, Data Center offers the control necessary to meet these demands. However, this control comes with significant responsibility for ongoing maintenance and updates.
Both deployment options offer scalability, but they approach it differently, affecting your long-term growth strategy with Atlassian tools.
Cloud Scalability:
Data Center Scalability:
As noted by Mehmet Sari from the Modern Collaboration Platform Team: "With data centers, we had to maintain a big team who was only checking networks, seeing if servers are running [...]. In the Atlassian Cloud, everything is done for us, and there's less downtime and better performance."
Understanding the financial implications of each deployment option is crucial for making an informed decision that aligns with your budget and growth projections.
Cloud Pricing Model:
Data Center Pricing Model:
Organizations like Rivian have reported saving 36% of annual tool costs by centralizing on Atlassian Cloud, demonstrating the potential financial benefits of cloud migration for enterprises of various sizes.
Security remains a top concern for organizations evaluating Atlassian deployment options, with each model offering distinct approaches to data protection and compliance.
Cloud Security Features:
Data Center Security Features:
While Atlassian Cloud operates on a shared responsibility model, the company handles much of the security heavy lifting, allowing organizations to focus on user access controls and data management rather than infrastructure security.
Perhaps the most significant divergence between Cloud and Data Center lies in access to new features and innovations, particularly in AI and automation capabilities.
Cloud-Exclusive Features:
Data Center Limitations:
According to Deviniti's analysis, "DC users are paying more for yesterday's tech. Meanwhile, Cloud users are getting new features: AI, automation, and consistent integrations."
Atlassian Cloud provides built-in AI capabilities that significantly enhance team productivity and streamline workflows across all Atlassian products.
The Atlassian Intelligence platform delivers automation features unavailable in Data Center, including:
Organizations like Thumbstack have reported resolving 15% of requests with no human involvement through automation and smarter processes, saving over 180 hours per month by automating repetitive tasks.
Data Center users must rely on manual processes or third-party solutions to achieve similar functionality, often with less integration and higher maintenance requirements.
The integration capabilities between Atlassian tools and third-party applications represent another crucial difference between deployment options.
Cloud Integration Benefits:
Data Center Integration Challenges:
One company reported struggling with limited plugin compatibility in their Data Center environment before migrating to Atlassian Cloud, where they gained access to a broader range of integrations and automation tools while reducing costs by 20%.
Modern work environments demand real-time collaboration capabilities, particularly for distributed and remote teams. Atlassian Cloud excels in this area with features designed specifically for contemporary collaborative workflows.
Cloud Collaboration Features:
Data Center Collaboration Limitations:
Nextiva transformed their Confluence from a tool used only by IT to an enterprise-wide collaboration hub after migrating to Cloud, with teams across marketing, HR, and sales now using built-in templates and automation to manage projects, reducing setup time and increasing adoption.
For IT departments, effective incident management is crucial to maintaining system reliability and user satisfaction. Atlassian Cloud offers advanced ITSM capabilities that enhance incident response and resolution.
Cloud ITSM Advantages:
Data Center ITSM Limitations:
These differences significantly impact IT teams' ability to respond quickly to incidents and maintain service levels, with Cloud providing automated tools that reduce manual intervention and accelerate resolution times.
For development teams, Atlassian Cloud offers enhanced tools specifically designed to improve the developer experience and streamline DevOps workflows.
Cloud Developer Benefits:
Data Center Developer Limitations:
These differences impact development velocity and code quality, with Cloud users benefiting from automation and intelligence that reduces manual overhead and accelerates delivery cycles.
With Atlassian's clear direction toward cloud prioritization, organizations still using Data Center should consider their migration timeline carefully. The longer the delay, the more complex and potentially costly the migration becomes.
According to migration experts, timelines vary based on organization size:
Creating a dedicated migration team is essential, including application administrators, system administrators, project managers, and specialists in network engineering, database management, site reliability, and security.
Despite Atlassian's cloud focus, certain scenarios may still warrant maintaining Data Center deployment:
Organizations in these situations should still develop a long-term strategy, as Atlassian's investment in Data Center continues to diminish relative to Cloud development.
While not officially announced, Atlassian's focus is clearly on Cloud solutions. Feature development for Data Center is slowing significantly, with a 30% price increase implemented in February 2025. Organizations should anticipate a potential phase-out in the future and plan accordingly.
Atlassian Cloud follows strict security measures, including industry-standard compliance certifications (SOC2, SOC3, ISO 27001/27018, GDPR, HIPAA), automatic security updates, and built-in security features like IP allowlisting and AI-powered security monitoring.
With proper planning and execution, data loss during migration can be avoided. Atlassian Partners offer expert guidance to ensure smooth transitions with minimal risk. Comprehensive testing and validation processes are essential components of successful migrations.
Not necessarily. While Cloud uses subscription-based pricing, it eliminates on-premises maintenance costs, infrastructure expenses, and IT overhead. Many organizations find that productivity improvements and reduced operational costs offset licensing expenses, with companies like Rivian reporting 36% savings after migration.
Yes, a hybrid approach allows organizations to maintain sensitive operations on-premises while leveraging Cloud for other functions. However, this approach requires users to navigate between different environments, potentially causing workflow disruptions and duplicate efforts.
Atlassian Cloud is a SaaS solution hosted and maintained by Atlassian, offering automatic updates, built-in security, and exclusive AI features. Data Center is self-hosted on your infrastructure, providing more control but requiring internal resources for maintenance and updates.
Cloud uses a subscription model with tiered pricing based on user numbers, while Data Center requires annual licensing fees plus infrastructure and maintenance costs. Many organizations report overall cost savings after migrating to Cloud despite subscription fees.
Most popular Atlassian apps have Cloud versions, but not all. Marketplace vendors are increasingly prioritizing Cloud development, with some apps becoming Cloud-exclusive. Before migration, inventory your apps and check compatibility with Cloud equivalents.
Migration timelines vary by organization size: small migrations (up to 1,000 users) take approximately 3 months, mid-sized migrations (1,000-5,000 users) about 6 months, and large migrations (over 5,000 users) 9 months or longer.
Atlassian Cloud maintains comprehensive security certifications including SOC2, SOC3, ISO 27001/27018, PCI DSS, GDPR, and HIPAA compliance, with continuous security updates and monitoring.
Cloud offers less extensive customization than Data Center but provides team-managed projects with independent workflows and a growing set of configuration options. Many organizations find Cloud's native capabilities reduce the need for complex customizations.
Organizations remaining on Data Center face increasing costs, fewer feature updates, limited app options as vendors prioritize Cloud development, and potential future migration challenges as the gap between platforms widens.
Yes, Atlassian Cloud supports major compliance frameworks including GDPR, HIPAA, and SOC2. For organizations with specific regulatory requirements not addressed by Cloud, Data Center remains an option while those requirements are added to the Cloud roadmap.
Cloud performance has improved significantly, with Jira issue navigation approximately 28% faster than older versions. Cloud also offers auto-scaling during peak usage periods without manual intervention, while Data Center performance depends on your infrastructure and tuning.
Atlassian Intelligence provides AI-powered automation including ticket triage, smart search, issue summaries, code reviews, predictive analytics, and virtual agents—all exclusive to Cloud with no equivalent features in Data Center.
The decision between Atlassian on-premise and cloud solutions ultimately depends on your organization's specific requirements, regulatory constraints, and strategic priorities. However, Atlassian's clear investment direction toward Cloud makes it the preferred option for most organizations looking to maximize value, innovation, and future-readiness.
As noted by industry experts, "At what point does staying on-prem stop being a preference and start being a bad business decision?" With 75% of surveyed customers reporting tangible returns from cloud migration within three months, the business case for Cloud continues to strengthen.
Organizations should conduct a thorough assessment of their current Atlassian environment, identify potential migration challenges, and develop a strategic roadmap for transitioning to Cloud—or for maintaining a Data Center with a clear understanding of the trade-offs involved.
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