I guess that's one way to lose your customer base. We have a team of 50 that will be switching to another platform shortly. Good bye HipChat...

Why do you care? If you ran the chat server locally, you'd have the ability to snoop already.

Atlassian themselves could snoop on your traffic; the only thing stopping them is their terms of service. All you have to do to protect your employees is publish clear guidelines on when and how your company will access employee communications on company-owned infrastructure -- bingo, problem solved.

Because this isn't communist Russia/China. There is a certain level of implied freedom and privacy here in America. That's why I fucking care.

If the company is paying for the chat service, it's the company's chat, and the company owns the logs. It's no different than a work email address/inbox.

And if I'm running the company, I don't want my employees to have to go through loopholes to chat privately. The company owns the water cooler too but putting a mic into it is not ethical behavior.

The decision of whether or not private chat occurs in that situation is up to your company though, not the company you buy the water from. This policy change by Atlassian shifts the ability to set policy where it should have been in the first place (as they've noted): to the company purchasing access to HipChat.

So set a policy that you won't read their messages. There's nothing new here.

It's nothing but a policy that prevents your SaaS provider from reading your data in the first place.

Employees don't generally have to worry about their SaaS provider having an impact on their performance review, paycheck, or continued employment.

Then just don't look at the logs, or turn them off.

If you care about personal privacy, don't use your employer's servers, and don't host your private conversations on a third-party SaaS.

Really? An implied freedom in the US? I agreed with your initial post, but this one is ridiculous.