9 ms·

Care to elaborate? Isn't their primary source of revenue gitlab(-ee) which is open source?

agibsonccc 10y ago
Open "core". There are a lot of open source companies (including mine) that have proprietary addons they sell. Open source companies can't scale on consulting revenue. It's fine for a lifestyle business but not a business you're trying to scale. The other way to do is via the hosted service route (which might not work depending on the vertical you're in..) There's all sorts of trade offs to running an open source company or even just open sourcing code. Eg: the bigger companies do it for hiring purposes. Devs do it to get hired or learn something. The companies themselves have to survive somehow, and the incentives will vary depending on the vertical and goals of the company.
- chrisseaton 10y ago
  'lifestyle business' is very patronising. Do you think all companies that can't scale massively such as consultancies are lifestyle businesses? What about something like Deloitte or KPMG? Are they just there as part of the lifestyle of the founders?
  - secfirstmd 10y ago
    I think the point is that pure open source tools often don't allow the founder(s)/maintainers to really grow out the company to large scale. They can continue to have a good lifestyle from the revenue they get for their open source tools and associated consulting but actually it's very hard to create enough surplus revenue to grow the business. Consulting on open source projects is very person/salary heavy. I think it's a fair point to make...
  - agibsonccc 10y ago
    Sure - and there's nothing wrong with that. Look at patio11 before he started starfighter. You could call it "bootstrapped business". Those companies still take a long time to build. To be fair - most of these businesses still rely on hiring lots of personnel. A software company by definition scales better than a consulting company. If the goal indeed is to scale with SAAS like margins then you are going to need a different model than consulting. That being said, we work with a lot of consulting companies (I even used to run one) called systems integrators. They make good money for their families and are pretty well off. Many of them are also subsidaries of very large conglomerates (Samsung SDS, LG CNS, SK C&C in korea for example) Those kinds of businesses don't need VC and shouldn't take it. I didn't mean it to be patronizing per se it's just different goals.
    - vonmoltke 10y ago
      > Sure - and there's nothing wrong with that. Yes there is: you are forcing a false dichotomy on the business world. "Businesses that 'scale'[1]" vs. "businesses that don't" is not a very useful classification, no matter what you call them. [1] Whatever that means; this has become one of those terms that means whatever the reader/author wants it ti mean.
      - marcosdumay 10y ago
        What? Some business scale, some don't. Consulting services are around the extreme of "non-scaling" business (the most extreme being specialized consulting), while licensing software is at the "scaling" extreme. There are lots and lots of thing in between.
        vonmoltke 10y ago
        > There are lots and lots of thing in between. That's my point. "Scaling" is, well, a scale. It isn't a binary (scale || !scale).
      - agibsonccc 10y ago
        http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html Anyways - FWIW I'm definitely biased. I'm a cofounder of a venture backed YC startup. Scale here typically means: software you can infinitely copy vs people who get tired. Personnel cost more than software. Does that make sense?
        vonmoltke 10y ago
        I agree startup == growth. I don't agree that making generalizations about !startup is useful. > Personnel cost more than software. Does that make sense? Yeah, but that's orthogonal. Needing more people makes scaling harder and more expensive, but doesn't fundamentally change the nature of the business or its goals.
        10y ago
  - squeaky-clean 10y ago
    > Do you think all companies that can't scale massively such as consultancies are lifestyle businesses? This is the term I've always heard for it. It's not insulting. Deloitte or KPMG aren't really... scale. They're huge, but that's not the same as scale. In 2015 Facebook made around the same amount of revenue as them, with like 5% of the employees. And they still have a ton of room to double their userbase, expand into new markets.... What would it take for one of those firms to double their revenue? If they had twice as many customers, could they handle it overnight?
- zanny 10y ago
  Wasn't aware Red Hat was a lifestyle business. That is a pretty big lifestyle with the billions of revenue.
  - agibsonccc 10y ago
    Red hat sells updates to their software + packaging. Horton also does this. They also sell apps on top of their platform. My point is: their model isn't just consulting. Cloudera is open core for their hadoop distro. Mesosphere tried closed source with DC/OS and it didn't quite work for them, but they also don't sell consulting. Docker as a business is also trying to monetize via NON consulting ways. These companies' goals are all to scale bigger though. Something to keep in mind though - red hat is a rounding error compared to say: microsoft. A lot of open source investors are looking for an open core model now. As I described there's different ways to go about it. We chose open core for ourselves though.
    - sytse 10y ago
      At GitLab we considered to charge for the packaging (our Omnibus packages and the package server). We decided to go for a GitLab version that was 100% open source and easy to install and a GitLab version that was closed source, contained additional features and was equally easy to install. Apart from RedHat few companies have been able to make the packaging work as a business model from a financial perspective. Hortonworks shows it is hard to make money with packaging alone http://www.infoworld.com/article/2854359/hadoop/why-hortonworks-cant-sustain-a-billion-dollar-unicorn-valuation.html http://www.infoworld.com/article/2854359/hadoop/why-hortonwo...
      - agibsonccc 10y ago
        I agree completely. We have pretty similar business models after all ;). We've been going upstream selling a "distro" usually with other stuff bundled in.
  - troydavis 10y ago
    Could you cite any other example(s)? If not, that Red Hat is the outlier (1 company in 20 years) seems to strengthen the prior commenter's point.
abetusk 10y ago
AFAIK, the enterprise edition (EE) used to be open source but is now closed [1]. There is an open source "community edition" which has many of the features of the enterprise edition, including self hosting, but lacks others [2]. While I find it unfortunate that GitLab doesn't have it's enterprise edition open sourced, I think they have enough goodwill in the community so that I'm not that angry about it. I would really be interested in hearing from the GitLab folk whether they think making their enterprise edition open source would really hurt their income and if they have any plans on eventually releasing their enterprise edition as open source (again). TLDR; GitLab has an open core business model. [1] https://en.wikipedia.org/wiki/GitLab#History https://en.wikipedia.org/wiki/GitLab#History [2] https://about.gitlab.com/features/ https://about.gitlab.com/features/
- vdfs 10y ago
  I thought the EE was open source: https://gitlab.com/gitlab-org/gitlab-ee https://gitlab.com/gitlab-org/gitlab-ee
  - abetusk 10y ago
    From the LICENSE file [1] to your link: ... This software and associated documentation files (the "Software") may only be used if you (and any entity that you represent) have agreed to, and are in compliance with, the GitLab Subscription Terms of Service, available at https://about.gitlab.com/terms/#subscription (the “EE Terms”), and otherwise have a valid GitLab Enterprise Edition subscription for the correct number of user seats. ... [1] https://gitlab.com/gitlab-org/gitlab-ee/blob/master/LICENSE https://gitlab.com/gitlab-org/gitlab-ee/blob/master/LICENSE
  - detaro 10y ago
    you can look at the source, but it is not "open source": https://gitlab.com/gitlab-org/gitlab-ee/blob/master/LICENSE https://gitlab.com/gitlab-org/gitlab-ee/blob/master/LICENSE
    - Siecje 10y ago
superuser2 10y ago
GitLab EE is not open source as far as I can tell. GitLab CE is, but it has fewer features. It's a freemium model. Unlike RedHat, GitLab actually sells software (that you can't trivially get some other way) and not just support/integration services.
sytse 10y ago
GitLab EE is proprietary.

Open "core". There are a lot of open source companies (including mine) that have proprietary addons they sell. Open source companies can't scale on consulting revenue. It's fine for a lifestyle business but not a business you're trying to scale. The other way to do is via the hosted service route (which might not work depending on the vertical you're in..) There's all sorts of trade offs to running an open source company or even just open sourcing code. Eg: the bigger companies do it for hiring purposes. Devs do it to get hired or learn something. The companies themselves have to survive somehow, and the incentives will vary depending on the vertical and goals of the company.

chrisseaton 10y ago
'lifestyle business' is very patronising. Do you think all companies that can't scale massively such as consultancies are lifestyle businesses? What about something like Deloitte or KPMG? Are they just there as part of the lifestyle of the founders?
- secfirstmd 10y ago
  I think the point is that pure open source tools often don't allow the founder(s)/maintainers to really grow out the company to large scale. They can continue to have a good lifestyle from the revenue they get for their open source tools and associated consulting but actually it's very hard to create enough surplus revenue to grow the business. Consulting on open source projects is very person/salary heavy. I think it's a fair point to make...
- agibsonccc 10y ago
  Sure - and there's nothing wrong with that. Look at patio11 before he started starfighter. You could call it "bootstrapped business". Those companies still take a long time to build. To be fair - most of these businesses still rely on hiring lots of personnel. A software company by definition scales better than a consulting company. If the goal indeed is to scale with SAAS like margins then you are going to need a different model than consulting. That being said, we work with a lot of consulting companies (I even used to run one) called systems integrators. They make good money for their families and are pretty well off. Many of them are also subsidaries of very large conglomerates (Samsung SDS, LG CNS, SK C&C in korea for example) Those kinds of businesses don't need VC and shouldn't take it. I didn't mean it to be patronizing per se it's just different goals.
  - vonmoltke 10y ago
    > Sure - and there's nothing wrong with that. Yes there is: you are forcing a false dichotomy on the business world. "Businesses that 'scale'[1]" vs. "businesses that don't" is not a very useful classification, no matter what you call them. [1] Whatever that means; this has become one of those terms that means whatever the reader/author wants it ti mean.
    - marcosdumay 10y ago
      What? Some business scale, some don't. Consulting services are around the extreme of "non-scaling" business (the most extreme being specialized consulting), while licensing software is at the "scaling" extreme. There are lots and lots of thing in between.
      - vonmoltke 10y ago
        > There are lots and lots of thing in between. That's my point. "Scaling" is, well, a scale. It isn't a binary (scale || !scale).
    - agibsonccc 10y ago
      http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html Anyways - FWIW I'm definitely biased. I'm a cofounder of a venture backed YC startup. Scale here typically means: software you can infinitely copy vs people who get tired. Personnel cost more than software. Does that make sense?
      - vonmoltke 10y ago
        I agree startup == growth. I don't agree that making generalizations about !startup is useful. > Personnel cost more than software. Does that make sense? Yeah, but that's orthogonal. Needing more people makes scaling harder and more expensive, but doesn't fundamentally change the nature of the business or its goals.
        10y ago
- squeaky-clean 10y ago
  > Do you think all companies that can't scale massively such as consultancies are lifestyle businesses? This is the term I've always heard for it. It's not insulting. Deloitte or KPMG aren't really... scale. They're huge, but that's not the same as scale. In 2015 Facebook made around the same amount of revenue as them, with like 5% of the employees. And they still have a ton of room to double their userbase, expand into new markets.... What would it take for one of those firms to double their revenue? If they had twice as many customers, could they handle it overnight?
zanny 10y ago
Wasn't aware Red Hat was a lifestyle business. That is a pretty big lifestyle with the billions of revenue.
- agibsonccc 10y ago
  Red hat sells updates to their software + packaging. Horton also does this. They also sell apps on top of their platform. My point is: their model isn't just consulting. Cloudera is open core for their hadoop distro. Mesosphere tried closed source with DC/OS and it didn't quite work for them, but they also don't sell consulting. Docker as a business is also trying to monetize via NON consulting ways. These companies' goals are all to scale bigger though. Something to keep in mind though - red hat is a rounding error compared to say: microsoft. A lot of open source investors are looking for an open core model now. As I described there's different ways to go about it. We chose open core for ourselves though.
  - sytse 10y ago
    At GitLab we considered to charge for the packaging (our Omnibus packages and the package server). We decided to go for a GitLab version that was 100% open source and easy to install and a GitLab version that was closed source, contained additional features and was equally easy to install. Apart from RedHat few companies have been able to make the packaging work as a business model from a financial perspective. Hortonworks shows it is hard to make money with packaging alone http://www.infoworld.com/article/2854359/hadoop/why-hortonworks-cant-sustain-a-billion-dollar-unicorn-valuation.html http://www.infoworld.com/article/2854359/hadoop/why-hortonwo...
    - agibsonccc 10y ago
      I agree completely. We have pretty similar business models after all ;). We've been going upstream selling a "distro" usually with other stuff bundled in.
- troydavis 10y ago
  Could you cite any other example(s)? If not, that Red Hat is the outlier (1 company in 20 years) seems to strengthen the prior commenter's point.

abetusk 10y ago

AFAIK, the enterprise edition (EE) used to be open source but is now closed [1]. There is an open source "community edition" which has many of the features of the enterprise edition, including self hosting, but lacks others [2]. While I find it unfortunate that GitLab doesn't have it's enterprise edition open sourced, I think they have enough goodwill in the community so that I'm not that angry about it. I would really be interested in hearing from the GitLab folk whether they think making their enterprise edition open source would really hurt their income and if they have any plans on eventually releasing their enterprise edition as open source (again). TLDR; GitLab has an open core business model. [1] https://en.wikipedia.org/wiki/GitLab#History https://en.wikipedia.org/wiki/GitLab#History [2] https://about.gitlab.com/features/ https://about.gitlab.com/features/

vdfs 10y ago
I thought the EE was open source: https://gitlab.com/gitlab-org/gitlab-ee https://gitlab.com/gitlab-org/gitlab-ee
- abetusk 10y ago
  From the LICENSE file [1] to your link: ... This software and associated documentation files (the "Software") may only be used if you (and any entity that you represent) have agreed to, and are in compliance with, the GitLab Subscription Terms of Service, available at https://about.gitlab.com/terms/#subscription (the “EE Terms”), and otherwise have a valid GitLab Enterprise Edition subscription for the correct number of user seats. ... [1] https://gitlab.com/gitlab-org/gitlab-ee/blob/master/LICENSE https://gitlab.com/gitlab-org/gitlab-ee/blob/master/LICENSE
- detaro 10y ago
  you can look at the source, but it is not "open source": https://gitlab.com/gitlab-org/gitlab-ee/blob/master/LICENSE https://gitlab.com/gitlab-org/gitlab-ee/blob/master/LICENSE
  - Siecje 10y ago

superuser2 10y ago

GitLab EE is not open source as far as I can tell. GitLab CE is, but it has fewer features. It's a freemium model. Unlike RedHat, GitLab actually sells software (that you can't trivially get some other way) and not just support/integration services.

sytse 10y ago

GitLab EE is proprietary.