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If I’m reading the revenue chart correctly, 12.5 percent of their revenue was approximately 11 million dollars in 2016. At Microsoft, who is even going to notic
by giobox 8y ago
If I’m reading the revenue chart correctly, 12.5 percent of their revenue was approximately 11 million dollars in 2016. At Microsoft, who is even going to notice that...
There’s surely a goodwill factor and wider strategic benefits here beyond the relatively small amount of revenue - these individuals enjoying the free private repos will in many cases likely be future candidates for customers for the enterprise offerings etc, or one day find themselves involved in discussions regarding managed VCS for a larger org. Given Microsoft’s current strategy to win over developers, this seems like a pretty sensible move, and the price (for Microsoft) very low. Strategically this seems not entirely different to the free accounts AWS throw at university students. Once you have someone hooked on your free offerings, you can start locking them into the wider platform (Azure) much more easily. Again, pretty much the AWS playbook.
Also, let’s not forget the 12.5 percent figure comes from 2016, a year which saw some pretty significant changes to GitHub’s offerings, such as unlimited personal repositories for paying users among other things. Prior to this you had to pay more to get more private repos. The number today may be somewhat different - I know my github spend went down following that change.
Also, 12.5 percent of revenues - comparisons to a 12 percent pay cut are pretty misleading.
- jjeaff 8y agoComparing 12.5% revenues to a pay cut is not misleading at all. Unless there is some reason to believe that making individual accounts free will somehow also reduce costs in a material way. Seems to me it will likely increase costs significantly as many more users will flock to create free private repos. In fact, it's more like giving you a 12% percent pay cut and then asking you to commute further to work.
- giobox 8y agoFocusing solely on the impact to Github’s bottom line kinda misses the entire point of Microsoft wanting to acquire them in the first place. A decision like this has to be viewed in the wider context of Microsoft’s market strategy and the rest of their developer tool portfolio, of which Github is just one piece. If Microsoft just cared about short term gains, there were much better ways to blow 8 billion dollars.
- Ensorceled 8y agoBut saying 12% is irrelevant to REVENUE is focusing on revenue. You can say losing the 12% is worth it, but you can’t say it’s irrelevant to revenue.
- MisterOctober 8y agoIndeed -- seems to me that the recent MS moves with Github are part of the same thought process that led them to include Bash / WSL in Windows 10.
- zild3d 8y ago> Unless there is some reason to believe that making individual accounts free will somehow also reduce costs in a material way It's misleading because it ignores user acquisition & conversion. Freemium often means you "take a paycut" on option A in order to make even more money on option B.
- TomVDB 8y ago> Comparing 12.5% revenues to a pay cut is not misleading at all. It's misleading in the sense that a 12.5% pay cut is not something I can recover in other ways. Meanwhile, there is a possibility that this 12.5% cut on individual account might be recovered automatically in other ways if it results in increased enterprise account. My personal private repos have always been on BitBucket. Not because I like BitBucket more, but simply because of the additional cost. Having unlimited private account on GitHub will encourage me to move my stuff there, and ultimately reduces the friction and increases the chance that at some time in the future I might be a paying enterprise customers.
- scarejunba 8y agoIf we’re going to use analogies like that, then this is like my benefactor uncle coming in with massive sums of money, telling me to stop working at the McDonald’s and pay someone to take my shifts, and focus on studying. Yeah, I take that deal every day of the week.