Feeds

Atlassian's UK-IPO plans: Smart business isn't a disaster

Start-up advocates miss the point

Secure remote control for conventional and virtual desktops

Australia's IT patriots' heads are spinning today, with news that Oz innovation poster-child Atlassian is going to move its head office to London, in preparation for an IPO it plans later this year.

The move has triggered an epic bout of hand-wringing at Australia's inability to keep its entrepreneurs at home. This, inevitably, re-ignites the “why can't we imitate Silicon Valley”, along with accusations that companies move offshore because this country is “unfriendly to business”.

Before I discuss the “Aussie! Aussie! Aussie! Oi! Oi! Oi!” patriotism that clouds peoples' thinking on such topics, I'd like to address Australia's alleged unfriendliness to business, particularly relative to England, where Atlassian is relocating its headquarters.

Australia's GDP has grown each year since 2007 – and from 2009-2012, the World Bank states the average growth has been 2.4 per cent. In the same period, the UK's GDP growth has been an average of -0.575 per cent. I fail to see how an under-performing economy can be described as “friendly for business”, except in this one characteristic, that the UK has lower corporate taxes than Australia.

What Atlassian is doing, in other words, is choosing to file its corporate tax returns in a country where it's cheaper to do so (with, we must assume, advice from the two Accel Partners Rich Wong and Kirk Bowman who sit on its board, courtesy of their $US60 million investment in the company).

The possibility that an IPO might mean a move offshore should have been foreseen since at least 2010, when Accel Partners first took its stake, since it would be looking for the best possible payout for its investment.

As El Reg noted in 2012, the addition of ex-Microsoftie Doug Burgum as chairman also hinted that the outfit was looking at strategies other than life forever as a hipster start-up.

Whether or not it had firm plans to relocate its head office, Atlassian was still happy to wrap itself in the flag during 2012. Here's how it was describing the Australian scene to the Sydney Morning Herald last June:

“Atlassian sees being an Australian company as a competitive advantage because there is less competition for talented engineers here. But they still cast a wide net for employees, recently driving a bus around Europe looking to hire 15 engineers in 15 days (over 1000 people applied)” (emphasis added).

So the first take-out from the Atlassian move is that like any other company anywhere in the world, when IPO time comes, it's structuring the business for the most favourable domicile. If that means seeking a better corporate tax rate, that's what's going to happen.

The Australian press is quick enough to slam the likes of Apple and Google for structuring their operations to minimise tax – but when a local golden-boy company does likewise, it's because Australian governments don't support our local startups.

Vulture South would also note that there's no apparent threat to the company's Australian operations – stories such as this, from Bloomberg, do not mention any intention to dump any local staff. The domicile is, at this stage, merely a convenience in the C-suite.

If Atlassian were to relocate its developers, it probably wouldn't be to London. The company already has operations in San Francisco, Amsterdam and Tokyo – but not London.

But that's purely speculative – and it's not something that would be accomplished easily. Given its oft-stated focus on the quality of its products, it would be foolish for Atlassian to sacrifice the continuity of its best and brightest.

As Vulture South has already noted, the relentless calls for Australia to try and recreate one of history's great accidents, Silicon Valley, are fruitless. Silicon Valley wasn't built by government or policy, and every attempt by governments to replicate the Valley experience has been a failure. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Yes, yes, Steve Jobs. Look what I'VE done for you lately – Tim Cook
New iPhone biz baron points to Apple's (his) greatest successes
Lords take revenge on REVENGE PORN publishers
Jilted Johns and Jennies with busy fingers face two years inside
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.