While I do think being installable on site helps, I don't think that is the primary advantage Atlassian has over other software companies.

In my opinion it has everything to do with the market. They build products for a market which likes good tools, has no problem putting them into their workflow, and telling all their peers about how awesome their tools are.

Contrast that to Zendesk which is largely a customer service tool. In a large company, customer service is largely run business majors who are more concerned with risk of process changes, than they are with (potential) cost savings from better software.