The aim of the partnerships is to add more "social computing platform" capabilities to SharePoint, which up till now has mainly been promoted as an "enterprise productivity platform". In other words, Microsoft is adding more web 2.0 functionality (e.g. collaboration, personal publishing) to SharePoint, using best of breed web products from Atlassian and Newsgator.

I sat down with Atlassian CEO Mike Cannon-Brookes yesterday in San Francisco, to discuss their partnership with Microsoft. Essentially it involves Atlassian integrating Confluence, their enterprise wiki, into Microsoft SharePoint (and vice versa). According to Cannon-Brookes, their customers frequently ask them how Confluence can be used alongside SharePoint - e.g. how content can be shared or searched between the two products. It's important to point out that SharePoint already has wiki and blog functionality, but they are generally considered to be rather basic compared to more sophisticated enterprise wiki solutions such as Atlassian's Confluence or SocialText.

SharePoint has a huge user base, so it's easy to see the attraction of this partnership for Atlassian. Microsoft has around 80 million users on SharePoint and is reported to be worth $800 M per year in revenue for the Redmond company. Atlassian has 4,100 Confluence enterprise customers.

1) Single search; Confluence is mainly used for "agile documentation", said Mike, which he defined as "in-between content" such as minutes to a meeting. For example, content that is more formal than an email, but not something you'd enter into Word. So the ability to search for wiki content using SharePoint (and vice versa) is being enabled by the plug-in. Cannon-Brookes said that this was the number 1 feature request for the plug-in.

2) Single sign-on with security; every SharePoint user gets a personal space, including wiki and blog.

3) Content Sharing; this means embedding content from Confluence into SharePoint, as a "web part".

4) Linking; Within Confluence, users can access SharePoint document facilities. By including SharePoint lists and content within Confluence, users can (in a single click) edit Microsoft Office documents.

In summary, Cannon-Brookes told me that the aim was to put as much of Confluence into SharePoint as possible; and the other way round too. For example SharePoint has great office integration (MS Office), so you can now have lists of Word documents in Confluence and effectively edit them inside the wiki product - or at least without having to switch programs.

I asked Cannon-Brookes how Atlassian and Microsoft will promote the partnership. He wasn't sure how Microsoft will promote it, but from Atlassian's point of view they'll use their existing partner and consultancy connections - particularly those who are already customers of both companies - to promote the hybrid.

What's in it for Microsoft? As is well known, Microsoft is a huge company that can be very slow to provide upgrades to its products. Microsoft probably can't iterate fast enough to keep up with agile startups in the wiki space, so they've decided that partnering is their option to keep up.

Conclusion

This is another great example of big vendors partnering with more agile, and smarter, startups to create better Web Office functionality in their products. It's win-win for both companies, although it's worth pointing out that Atlassian is a Java shop. So perhaps in this case the partnership won't lead to an outright acquisition. Also Confluence is just half of Atlassian - they also run a development tools business (again Java based). Still, the deal will be great for Atlassian's business. By their own account Atlassian is the leading enterprise wiki vendor - and judging by their customer numbers this seems to be the case - so this will only cement that position in that market. For Microsoft, they get a 'best of breed' Web Office app to beef up their hugely profitable SharePoint product.