A few reasons I don’t think that will happen:
- private, single contributor repos tend to be pretty small. it costs Github very little to service a single account.
- Github is a growing social network for developers. Getting young engineers on the platform for free will pay off handsomely when they join a team and automatically assume Github is their code storage tool of choice.
- Microsoft gets the reputation points for running the de facto developer social network (other than Stack Overflow).
GitHub is in the strange position of being both a successful enterprise product AND a social network. What other product exists with that kind of crossover? Microsoft will continue to optimize their enterprise revenue from GH and I think this is a tremendous step forward toward building the network long term.
For some background, check this HN classic: "Commoditize your complements" (https://www.gwern.net/Complement#2)
For the first time, developers can use GitHub for their private projects with up to three collaborators per repository for free.
The free repos are kind of a loss leader to bring in users onto the platform to keep Github as the de facto provider.
This is great news. I still prefer then issue management abilities of Gitlab nested projects, but choice and competition are good for the end user.
It's amazing that Microsoft came back to life from being a zombie company. In hindsight, it was such a large zombie that it had sufficient time to change business models. Somehow Sears wasn't. There's a business school case study and tenure buried in there.
MSFT has changed in some positive ways, but since Satya took over, growth has been actually flat-ish to negative overall until 2018 (a good year). Paradoxically, MSFT stock was flat during the Ballmer years when there was rock solid consistent growth.
The 'new MSFT' things is quite overrated in terms of what it really means for the company overall. We HN readers tend to considerably overvalue actions that might seem positive, such as things like open source contributions. MS VS Code is great, but it's not hugely material next to core business. Most of the world really does not care, and they are buying gadzooks worth of MSFT products and services. For better or worse.
Satya nadella made a surprising change for Microsoft. If a company is going to last long term they have to do more than look at their own navels. You can't just focus on squeezing more money out of your existing lemons.
Happening now at Apple?
Ballmer did not 'squeeze lemons' - he multiplied the company by like 4x. The 'cloud' FYI was a big new thing. All MS products have evolved quite a lot and are not the 'same products'.
What new products / initiatives has Satya introduced that are lining up to be the future of MS? That will replace the core products sometime?
A ceo of a tech company has to both grow revenue and cultivate new technologies. A major company working in almost every area like microsoft has to do even more, so they don't get usurped like endless other former leading companies. Microsoft was challenged in a lot of ways. Ballmer did very well on the bringing in more money area.
1. mobile phones (basically completely blew it here - they had all the pieces but couldn't put them together because of both poor execution and more nimble competitors). Ballmer did terrible here. Even buying nokia was a disaster.
2. web - they managed to keep it microsoft centric for a long time where it only rendered correctly on ie3, but it eventually escaped them. they do sell some web server software, but the days where it had to render correctly on windows, both preventing other platforms from being used and being used for hosting web apps are gone. He held the world at bay for a long time, so I'll give him 25% success here.
3. cloud - azure started under him, so I'd give him 50% success. Who would have thought amazon would kick Microsoft's butt so thoroughly. I saw so many good people go to work there, I never thought amazon would succeed with such a different philosophy, people leaving there so frequently after 2 years.
4. Money, growth - 4/4. So much money. Yet at the same time, people started looking for other companies, and the company felt more and more like it was missing out by forcing everything to reinforce windows and office.
Satya has at least changed the tenor of the company, attracting developers back. I do think Windows seems to have turned into a terrible mess, with unless beta releases with lots of bugs. They fired all the testers because they weren't doing anything? Satya was also leading the azure division, so I think he does get some credit for that.
There was speculation that Microsoft made more from Android for years from patents than Google made.
Besides, Microsoft is still making pretty good money on mobile by targeting developers with Azure and tools like Xamarin
I also doubt that too many people who are spending less than $300 on phones (the average selling price of Android phones) are the target market for Microsoft.
Statistically, Google has captured market share of people with less disposable income than Apple has. It’s at most Pyrrhic victory.
Contrast that with Ballmer, who consistently and reliably grew the company with solid numbers for over a decade, and was rewarded with a stock lift of 0.
The stock lift of MSFT over the last few years is the result of Ballmer. A) his tenure and B) the fact the stock was obviously suppressed a little bit during that time, only recently have the multiples been allowed to shift, and when they did ... the valuation jumped up.
Satya seems to be doing well, but for now it's mostly politics and perception. We'll have to wait and see if his material contributions lead to material change in terms of product and revenue at MSFT.
I grew up in the nineties; things were different then. Visual Studio was the go to product for many developers and developing on windows was a given. Macs didn't become useful as developer machines until a decade later and Linux was a something you ran in your closet or on a old hand me down PC (been there done that). That changed under Ballmer's rule and he failed to adapt. He alienated developers and failed to move windows forward; all while bashing Linux and the Open source community in futile attempts to stem the bleeding of mindshare, revenue, and share holder value.
Fast forward five years or so since Nadella took over and the stock has responded positively to post Ballmer changes by Nadella to bring MS into this century after what was a lost decade.
MS now does open source and established itself as a credible player in the OSS community, it killed off windows phone, opened up the lucrative office ecosystem to non windows platforms by e.g. treating Android and IOS as first class citizens and supporting things like Chrome OS. By embracing linux and open source, and by turning Azure into a very competitive product that mostly runs Linux. He just took Edge out the back and shot it as well.
The net result of all this is that he re-established MS as a company that appeals to developers because despite his famous Mantra, developers were running away under Ballmer. VS Code, having SQL Server supported on linux, supporting Linux and contributing to it, embracing the wider C# ecosystem outside of the Windows silo, buying Github, etc. are all clever moves that rebuilt lost trust. All these things were unthinkable under Ballmer. Even Windows 10 is starting to look pretty nice to people like me with it's linux subsystem, Docker support, and nice hardware options.
As a consequence they have a lot of healthy growth in their cloud business because developers take them serious again. Shareholders are liking this and their prospects for more growth through a portfolio that is no longer just wintel laptop based revenue.
I see no evidence for your statement.
Ballmer 4x-ed MSFT revenue during his tenure.
He made far more money for MSFT than Gates ever did, and his growth track record is better than Satya so far.
Ballmer pushed XBox, Azure, Office/Cloud, re-orged the sales teams. Increased revenues for all the other major product lines.
Bing and Mobile were a fail, but they did other things well, moreover, they're up against the top 2 companies in the world in Search and Mobile - no easy feat.
All of your points are descriptive, but they don't really represent huge materiality in terms of business outcomes.
MS was never losing developers.
It's 'OSS contributions' really don't make that much of a difference.
Revenue under Satya has been up and down, with no real progress for his first several years until 2018 (2015 being the watermark).
MSFT today was made by Ballmer, most of the things you indicated are good, but not hugely fundamental.
You seem to equate revenue with success, which is not how this stuff works. Shareholder value is actually tied to the prospects for long term success (accumulated profits over time). MS shares were considered overvalued, not undervalued when Ballmer left (or depending on your interpretation, fired by an unhappy board).
Its OSS contributions are critical to both MS and how well it is able to convince developers to build on top of MS platforms. It's critical for it's credibility with Azure. I know people that now consider this a serious alternative to AWS or Google cloud that for sure don't have any interest on running C# on Windows Server while using SQL server. But it sure is a nice way to run some Linux stuff these days.
Satya Nadella also had to absorb a lot of the Ballmer era mistakes. Like paying five billion for the right to shut down an organization (Nokia's Phone business) for probably billions more. As I recall, that was one quarter where MS indeed made a historically unique loss and Ballmer pushed that deal through. Bing indeed is another dud. Windows Phone itself of course was the latest in a series of failures for MS to capture the mobile market that date back to last century.
The fact that it took a few years to recover after Ballmer left strongly suggests that 1) there were indeed problems in MS (i.e. shareholders were right) 2) Nadella addressed those problems. MS is of course valued around a 1 Trillion or so now. This may have a thing or two to do with the fact that he's not doing that bad of a job and that their future looks a lot brighter than a few years ago.
Growth and/or stock market performance are often only indirectly coupled or lag by years better strategy, innovation, management, etc.
Unfortunately sometimes good decisions never cause growth, there’s no simple formula.
Once, I was doing an embedded system for a consumer product in the Xbox group. We started out trying to using Windows CE, and after three months of pushing that horrible mess up a hill [holy Toledo, what a steaming pile...] we ditched it in favor of something really simple that could actually do the job, instead of the politically correct thing that we'd been "encouraged" to do. (Honestly, words fail me at how badly designed and buggy the the whole WinCE code base was).
At the time, Ballmer was all about everything having to be Windows. "Windows Foundation" for TV, "Windows Auto", Windows This-and-That. I joked that we wouldn't be allowed to ship our firmware until we named it something like "Windows Just An Event Loop And Some Interrupt Handlers".
Seems strange to me that they are neglecting the client platform (and developer tools to! used to be very important under Balmer), the lock in effect used to be driving demand towards NT server.
to put it frankly: I don't quite understand the grand strategy of MS.
The Sears folks are pirates, they don't give a shit about Sears and just want to extract as much money as they can.
Edit: example - Google paying for Chrome, Android - this is 'complementary'. Google giving away free personal ads on search ... 'core'. MSFT giving away free dev tools, Bing search - complementary. Giving away 'Windows Home' for free ... 'core'.
Any literature/thoughts on when to commoditize complements rather than trying to vertically integrate? Private repos might be a complement to github's other business, but it doesn't naturally follow that they should commoditize it in all situations
“Commoditize your complements” is a phrase popularized by Joel Spolsky but the book uses the broader of term: “maximize your value”. Commoditization is one of a few ways to maximize your value.
 https://medium.com/@moritzplassnig/github-is-doing-much-bett... (disclaimer: I wrote the article but the data is by Bloomberg)
Your assertion can only make sense if you also believe that a 12% paycut is irrelevant to your income.
You only see the short term.
I was on Github during my university, all my projects were there, my team mate were on there too, it was pretty great. When my student account expired, I decided to move everything to Gitlab. I didn't want to move but I won't pay 7$ a month to host my old school projects and some personal stuff. Now that I did move everything, I actually enjoy Gitlab quite a bit.
What do you think I'm going to use if I start a commercial project? In the past I would have chosen Github, but now that I'm comfortable with Gitlab and see all its benefits, it's probably the one I would choose.
Cutting that 12% may lose 12% in the short term, but in a few years, it's going to gain you much more than 12%.
If you think about mid-sized software companies (~10-100 devs), if 80% of your developers have a strong preference for Github over Gitlab or Bitbucket, then that company is likely going to stick with Github or decide to move to Github eventually. I think this is where Github captures much more than that 12% revenue that they are giving up right now.
Now, if personal accounts were far less (e.g. 1% of revenue), I could see the argument that they're irrelevant.
Maybe I'm just complaining about vocabulary, and perhaps your clarification was what the OP intended.
I moved all my personal repos to Bitbucket a while ago, as it was free, and have referred them several paying customers from my clients.
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.
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.
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.
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.
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.
Yeah, I take that deal every day of the week.
Beyond a certain hand-to-mouth income it is (e.g. 150K vs 132K).
And many people chose pay cuts over personally overworking or stretching their business too thin.
The overly trivial point being behind the parent argument is that 100% of your revenue if better than less than 100%. Which is not always the case in business.
Businesses and freelancer drop gigs all the time to concentrate on where their main income is coming from. If you have a difficult customer or few demanding customers that generate just 20% of your income, it's often wise to drop them to focus on your easier 80%.
If that WERE the reason, they'd be charging for visual studio code, not giving it away.
All of Github's competitors (i.e. gitlab and bitbucket) already offer unlimited private repos. This is Github catching up.
However, I don't think it will be an issue. As hosting costs drop to zero, if someone starts charging, they lose customers to a free competitor. (as is happening here).
Unless .. all github revenue is irrelevant for Microsoft - which might be true, for all I know.
Source: I am the CEO of Sourcegraph and consider similar things.
But in reality, the source of your customers' income has little to do with value. B2B is favored because the margins are generally higher.
As a particular former Microsoft CEO put it: "[…] DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS […]". That strategy/desire hasn't exactly stopped, though it's certainly transformed quite a bit over the last couple decades (and Microsoft is finally actually getting somewhat effective there).
Meh, just fire 12.5% of the staff. /s
With this change, Github foregoes a little revenue in exchange for securing the vast majority of their revenue.
It turned out to be damned easy (and very cheap) and that's a serious threat to github's future growth because once people start to default elsewhere for one type of their work, it tends to drag along other types of their work.
But, for one very obvious reason, people have grown more and more interested in finding alternatives to Github, and they're forced to compete.
Gitlab and Bitbucket both heavily positioned themselves against Github with their unlimited private repos feature. With this competing with Github is going to become much harder. I think it's a smart move for MS.
LinkedIn comes to mind, which was also aquired by Microsoft.
Have they ever done that? I wasn’t aware of any such thing.
Here more about GitHub suffering from state-censorship: https://en.wikipedia.org/wiki/Censorship_of_GitHub
GitHub also censors any content that they deem stolen (such as the NSA Malware / EquationGroup releases) and content that they deem containing PII-data (such as the public LinkedIn crawl of people stating they work for ICE).
GitHub makes judgment calls on what to censor: They deem a project name offensive, they deem some piece of code stolen (unless the NSA admitted to them it was legit, they had no confirmation), they deem publicly available data crawled from the web PII or harassment instigation.
Unless you do not classify these examples as censorship, it is what it is.
The objection stems from the fact that censorship is always a dominant issue raised in discussions about platforms for sharing and, while it's important to keep it in mind if you're the type of person who might share controversial or objectionable content, that is type of sharing is the minority.
If we were in an oppressive regime like China where state mandated censorship is the norm, then it would be a much more pressing concern. But for most of us, we're not under an oppressive regime and decrying the platform for censorship is on par with complaining that reddit won't let you dox people or flicker banned you for posting kiddieporn.
Sourceforge did some absolutely egregious things, including bundling adware with windows binaries.
Maybe the people at Microsoft don't know it, but one of the reasons GitHub has such a huge market share is because it hasn't done any of those things.
Sure, MS could have bought it to use its reputation as capital and try and maximise income at all costs. It seems that would be somewhat counterproductive, given the long process Microsoft has gone through to start fixing its image with developers.
Microsoft would only stand to gain (short or long term) if it's been engaging in its traditional EEE strategy this whole time and is ready to pull the trigger on that final E. Even if that's the case, I can't see any real benefit; it'd just be a middle finger to developers.
Github on the other hand has actual useful software that is separate from their user base.
I don't think they are comparable.
Github student pack was already a thing.
I'm one of them that moved to Gitlab afterward and right now I currently hesitate to go back to Github, even if its free.
If you’re not the customer you’re a product... but it doesn’t follow that, if you are the customer, you’re not also a product.
Microsoft's knows they ought not piss off 28 million developers.
1. I literally forgot about Gitlab as a Github substitute when I wrote the comment, interpret that as you may.
Yes, that is the obvious risk. Gitlab is the #2 in the space, right now they don't have much market share but if an avaricious corporation violated the spirit of Github? It might be the chance they need.
But in a social network I am the product
Github users are interested more in code than in people. Sure, you can use it to follow your favorite coders and technology people that you respect and look up to, but I have a feeling most people aren't doing that too much.
Like most developers, I use Github extensively to obtain open-source code that I use in projects. Sometimes, I explore Github to look for new things, or see what kind of projects are popular since I've last checked (maybe once or twice a year). Usually, it is the canonical source of information for large open-source projects; the code lives there and issues / bug reports live there. While using it in this manner, I don't look so much at who is posting comments / commits, as I do at the content of the commit or comments on issues, and whether the information is relevant to me.
I'm sure the screws will tighten on it. Unless Microsoft's entire plan is to run it forever, giving blank checks to GitHub, as a way to endear developers to Microsoft.
Integrations/hooks/CI add some stickyness which is probably why places like Gitlab focus on offering CI to be more than simply “git in the cloud.”
Small but important correction, Github is letting up to 3 contributors use these free private repos.
"For the first time, developers can use GitHub for their private projects with up to three collaborators per repository for free."
Among other things, a private repo is a file system with full history. Anything that can be used as a file system will likely get abused.
More generally, this kind of argument basically says "this company will likely ignore this revenue stream forever", which doesn't sound very likely in the long run.
This might also be an attack on GitLab, which I believe has had unlimited free private repos for a while.
My feeling is that this is more a move to fight competitors.
Free is pretty cheap though. Is there going to be a size limit? If not I can see people uploading all sorts of "interesting" data to github.
That's interesting to think about. Who knows, maybe GitHub will become the next LinkedIn for developers? Or for everyone? LinkedIn is nearly unusable these days, in my opinion.
I mean, it costs them peanuts to run them, but a lot of people will cancel their premium accounts (including me).
Those aren't exactly little-known products.
I was looking into LambCI but it only supports github.
I was using bitbucket for private repos.
It only supports github.
For my hobby projects i can't afford to host gitlab CI/Jenkins or pay for premium CI services.
Now, i can run my tests on Lambda,yay!