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Building a Coder's Paradise Is Not Profitable: GitHub Lost $66M In Nine Months Of 2016 (bloomberg.com) 227

Posted by msmash from the it's-not-easy dept.
Though not much popular outside the technology circles, GitHub is very popular among coders around the world. The startup operates a sort of Google Docs for programmers, giving them a place to store, share and collaborate on their work. But GitHub is losing money through profligate spending and has stood by as new entrants emerged in a software category it essentially gave birth to, according to people familiar with the business and financial paperwork reviewed by Bloomberg. From the report: The rise of GitHub has captivated venture capitalists. Sequoia Capital led a $250 million investment in mid-2015. But GitHub management may have been a little too eager to spend the new money. The company paid to send employees jetting across the globe to Amsterdam, London, New York and elsewhere. More costly, it doubled headcount to 600 over the course of about 18 months. GitHub lost $27 million in the fiscal year that ended in January 2016, according to an income statement seen by Bloomberg. It generated $95 million in revenue during that period, the internal financial document says. The income statement shows a loss of $66 million in the first three quarters of this year. That's more than twice as much lost in any nine-month time frame by Twilio Inc., another maker of software tools founded the same year as GitHub. At least a dozen members of GitHub's leadership team have left since last year.
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Building a Coder's Paradise Is Not Profitable: GitHub Lost $66M In Nine Months Of 2016 More

Building a Coder's Paradise Is Not Profitable: GitHub Lost $66M In Nine Months Of 2016

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  • So they make money selling private code repositories. If you want something really private, why use a 3rd party hosting service? So that you have a neck to wring when it leaks? Your private repository is just a NSL away from giving everything up without you ever knowing. Or a hack away. Or just a password-reuse user fail away, as happened 6 months ago.

    • They're selling convenience.

      Most software managers don't care too much if someone that can produce a NSL gets to see their source code. They are concerned about direct competitors having access, and they're concerned about having to pay sysadmins to handle the development environment. Sysadmin labor isn't cheap, and neither are the servers, storage, backups, auditing, or workflow tools that make development happen.

      If your business is making software, you can just pay GitHub for that infrastructure, and focu

      • So when you decide to mitigate the risk by bringing it all in-house, you can't. Pretty stupid excuse. For large projects at large firms such as those mentioned in the article (Walmart, Ford, etc), you need these types of people on hand anyway. Farming out shit "for convenience" isn't an excuse for being lazy.

        Sure it might cost more, but if you farm it all out your business will consist of workers who are jack-of-all-trades and master-of-none. Perhaps this trend explains the mediocrity of today's products.

        • So when you decide to mitigate the risk by bringing it all in-house, you can't.

          Not sure why that would be the case. You're still using git as your client for interfacing with github, so each developer should still have the entire source code history. If you want to re-centralize on-site, just have a dev pull the latest from github, add a new remote to the on-site server, and push. You can then delete your github repository, which is supposedly a permanent, non-reversible act.

          • We're talking about people securing the local server that would now run the repository - something that their customer IBM should be able to do instead of using github, if only to better position themselves with yet another sales option to their customers.

        • Perhaps this trend explains the mediocrity of today's products.

          I don't think it covers all of it, but it plays a role in it.

          Companies have moved past seeing IT as some magical resource and see it about the same way most first world nations look at a toilet. Unless it's really shitty, everyone just expects it to be everywhere they go and function good enough to get the job done. There a few out there that understand that it's something that plays a role in life three to five time a day and that when shit is serious, you're really going to enjoy having a top of the lin

        • So when you decide to mitigate the risk by bringing it all in-house, you can't.

          There are reasons to bring infrastructure in-house, but risk mitigation isn't one of them. Your risk is mitigated by having an SLA with a provider whose primary function is to maintain those servers, with penalties attached for downtime to compensate for the loss.

          For large projects at large firms such as those mentioned in the article (Walmart, Ford, etc), you need these types of people on hand anyway. Farming out shit "for convenience" isn't an excuse for being lazy.

          No, those companies really don't need a devops sysadmin on hand. They need sysadmins in other areas, who can focus on those areas, but they don't need nearly so many supporting the development.

          Sure it might cost more, but if you farm it all out your business will consist of workers who are jack-of-all-trades and master-of-none.

          Really, it works the other way. If you farm out distinc

    • If you want something really private, why use a 3rd party hosting service?

      How much do you have to spend on system administrators to keep the server that's hosting your stuff secure? For small organisations, the cost of GitHub is a lot lower than the cost of a private repository with the same level of security.

      • Read the article (I know, heresy here but still) - they make their money from large corporations, the ones who (like their customer IBM) should be able to eat their own dog food.

    • Re:Selling private repositories is their money mak (Score:5, Interesting)

      by ShanghaiBill ( 739463 ) on Friday December 16, 2016 @01:44PM (#53498237)

      If you want something really private, why use a 3rd party hosting service?

      Most companies don't need "really" private. They just need "normal" private. I don't wan't to just open all my code to the world, but it isn't something I lose sleep over.

      I once consulted for a company that was considering open sourcing their main product. Some people were opposed, and thought they would be giving away their "crown jewels", but they decided to go ahead. A year later, we checked, and the OSS repo had been downloaded this many times: 0.

      The hard truth is that nobody cares about your crappy code, and even if you give it away, you will often need to work hard to get people to use it.

    • Re: (Score:3)

      by Altus ( 1034 )

      The issue isn't that they are selling something people don't need, because tons of companies use their service.. and the issue isn't that it doesn't make money because clearly it does... the issue is that it take 600 people to run the business which seems insane.

      • They're losing money because of the high sales costs. And when they cut sales staff, they'll lose market share and customers. That's the problem when you sell a commodity that anyone can compete with you - you don't have any real differentiator except cost - so you create the market, and someone who has less overhead steals it from you because they can charge less. They are pretty well hosed.

    • Re: (Score:2)

      by jopsen ( 885607 )
      Most small startups or contracting gigs, don't worry about things like that... It's much more valuable to not have a sysadmin managing, scaling and patching a server running git locally...

      Honestly, a github organization with solid policies and 2FA for all users is pretty solid. Sure github could get hacked, but they have entire security teams to mitigate that risk. Your average basement git server doesn't have any security teams.

  • Perhaps (Score:4, Insightful)

    by Anonymous Coward on Friday December 16, 2016 @12:51PM (#53497813)

    GitHub should worry about actually building their core product rather than spending all their time on social justice crusades.

  • Before or after? (Score:5, Informative)

    by Chris Katko ( 2923353 ) on Friday December 16, 2016 @12:56PM (#53497857)

    Before or after they started pissing people off by deciding what "was" and "wasn't" an acceptable repo, which magically lined up with SJW views.

    "Opalgate", anyone? Read the comments yourself.

    https://github.com/opal/opal/i... [github.com]

    https://news.ycombinator.com/i... [ycombinator.com]

    Hiring a SJW, Coraline Ada Ehmke, to run "anti-harassment." (Good thing people on the left never harass anyone.)

    http://www.breitbart.com/tech/... [breitbart.com]

    The second you start judging what is, and isn't, "moral" (as opposed to acceptable to your standards ala no porn), then people are going to 1) get worried their repo might get affected, or 2) say "fuck you" altogether.

    • Re:Before or after? (Score:4, Insightful)

      by Archangel Michael ( 180766 ) on Friday December 16, 2016 @01:05PM (#53497923) Journal

      SJW are emotional children acting out against whatever injustices they can imagine.

    • Re:Before or after? (Score:5, Insightful)

      by BarbaraHudson ( 3785311 ) <barbara.jane.hudson@nospAM.icloud.com> on Friday December 16, 2016 @01:08PM (#53497957) Journal

      Threatening to close down a repository (your second link) because someone used the word "retarded" is retarded.

      People who are offended can stand on their own two feet if it's that important to them. SJWs telling them that SJWs need to defend them is just infantilizing them. The whole SJW thing need to die, as do the people milking it for money.

      • Re: (Score:3)

        by lgw ( 121541 )

        Threatening to close down a repository (your second link) because someone used the word "retarded" is retarded.

        "Retarded" is also a perfectly cromulent engineering term. We no longer manually advance or retard the timings in out cars as part of a tune-up, but people still write software that manages advancing and retarding.

        • Re: (Score:2)

          by AmiMoJo ( 196126 )

          It's not the word itself they objected to, it's the context and meaning.

          • Re: (Score:2)

            by lgw ( 121541 )

            In code comments or something? I mean, how did anyone notice? Sounds like it wasn't wordfilters or something silly like that.

            • Re: (Score:2)

              by AmiMoJo ( 196126 )

              If you check the link, it was fairly prominent.

              Github isn't 4chan. It's a business platform, designed to make money one day. A lot of its value comes from the fact that businesses do use it, that people feel they can show it to employers, i.e. that it isn't 4chan.

              Free Speech Warriors just need to accept that not every website wants to allow controversial content. They banned lots of controversial things, like the GamerGate harassment organization repo, because Github isn't supposed to be some kind of test o

    • Re:Before or after? (Score:5, Interesting)

      by OneoFamillion ( 968420 ) on Friday December 16, 2016 @01:32PM (#53498127)
      Congratulations, sitting alone here at home, I actually uttered the words "what the f*ck is this sh*t" out loud when I opened that GitHub link. No mean feat, considering how difficult asterisks are to pronounce.

      • Re: (Score:3)

        by CRC'99 ( 96526 )

        Congratulations, sitting alone here at home, I actually uttered the words "what the f*ck is this sh*t" out loud when I opened that GitHub link. No mean feat, considering how difficult asterisks are to pronounce.

        This. I read through the first two dozen or so posts, then realised how many posts there were and my first thought was "These guys are morons."

        It's like the joke: How do you find a vegan? Don't worry, they'll tell you.

        As a developer myself, I don't care what your sexual preferences are, who you want to be in life, what your favourite colour is, what your political beliefs are. Its all irrelevant. What I care about is what your diff / patch / pull request does, is it going to break anything, and is it ok to

  • 600 employees (Score:4, Interesting)

    by 110010001000 ( 697113 ) on Friday December 16, 2016 @01:02PM (#53497901) Homepage Journal
    Why do you need 600 employees for Github? You need a tenth of that, including engineering, marketing, sales and support.

    • The funny part is that lots of the "usual suspects" (who complain about things) on slashdot are complaining about the number of employees, and then I was over at gitlab (who is supposedly the much better role-model) and they have 21 open positions.

      It may be that people commenting simply don't have any experience in what staff is needed for this service. For example, I've seen comparisons to craigslist, but craigslist has no corporate services; all they do is offer free consumer services, and advertising. Pa

  • Comment removed (Score:5, Interesting)

    by account_deleted ( 4530225 ) on Friday December 16, 2016 @01:09PM (#53497961)
    Comment removed based on user account deletion

    • Agreed. While I'd prefer Github, we found their pricing to be really uncompetitive. We found Atlassian's offerings to be basically just as good but much more cost effective.

    • Very few companies have 20 developers and think $5k is more than pocket change. This is a critical service and most of their customers would spend more just doing an evaluation to find out if something else that is cheaper can meet their needs, and what the differences in risk are.

      Companies pay $50k/yr just to have phone support from a specialist. $5k for hosting, well is it important to what they do? Yes or no?

      For me the answer would be no, it isn't important at all to have hosted code repos, it is a minor

      • Re: (Score:3)

        by guruevi ( 827432 )

        In the end it's just a Git repo, if you have 20 programmers, you have at least one of them that can set up a server somewhere, there are even VPS providers that will fully manage a container. Sure the UI is nice, but there are better Git programs on the desktop, most of which are free.

        The problem seems to be '600 employees'. I can understand a handful of coders, designers and sales people but 600 of them and then sending those 600 people all over the world? That's a huge enterprise, you could run Github on

        • In the end it's just a Git repo...

          Nope. And if you would be happy with just a git repo, you shouldn't have even been looking at their enterprise services. It isn't a git repo, and it can't be replaced by a git repo.

          Not everything that you don't know what it does, does nothing. Some of those things do things you simply don't know about.

  • Use GitLab instead (Score:3)

    by YutakaFrog ( 1074731 ) on Friday December 16, 2016 @01:17PM (#53498017)
    First of all, this is easily the worst description of any technological subject I've seen on Slashdot for a long time: "The startup operates a sort of Google Docs for programmers, giving them a place to store, share and collaborate on their work." It does give you a way to store, share, and collaborate, but the mechanisms are drastically different. Google Docs collaboration is synchronous, GitHub's is serial.

    I think GitLab has emerged rapidly the last two years or so as a very viable alternative to GitHub. If you want to use their hosted service, it's free for as many collaborators as you want, for as many projects as you want, that don't have to be public. It includes built-in continuous integration services, Kanban-style issue boards, Slack-style chat, and way more all for free. They're iterating and adding new features at an incredible rate. If you want to host your own, that's also free if you don't need any of the enterprise-edition features, which leaves the community offering still quite good.

    Early this year, when the open letter to GitHub was posted, GitLab made their own post ( https://about.gitlab.com/2016/... [gitlab.com] )about how they're working to solve the problems presented, even though they weren't specifically the addressee of the letter. I never did hear about GitHub actually responding to that letter, and I've seen very little iteration or change from GitHub in a very long time.

    • Re: (Score:2)

      by Hulfs ( 588819 )

      I've seen very little iteration or change from GitHub in a very long time.

      That's just plain disingenuous. They just released some nice code review stuff and projects support a couple months ago: https://github.com/blog/2272-i... [github.com]

      Here's their new feature postings: https://github.com/blog/catego... [github.com]

      They release something just about every couple weeks. It's not always huge, but they do iterate fairly often.

    • this is easily the worst description of any technological subject I've seen on Slashdot for a long time: "The startup operates a sort of Google Docs for programmers, giving them a place to store, share and collaborate on their work." It does give you a way to store, share, and collaborate, but the mechanisms are drastically different. Google Docs collaboration is synchronous, GitHub's is serial. ...

      So despite the description being accurate, it's "the worst description of any technological subject I've seen" because of your made-up pedantic formalism? Who cares if it's synchronous or serial, the article did a good job explaining a complex product;

      • I think the point I was trying to make is that GitHub and GDocs feels very different. One is methodical and peer reviewed, one is kind of an editing free-for-all. But as I was trying to boil down what makes them different, it really just came down to how the collaboration is timed. I still maintain that it makes a big difference, but you're not disputing that. As you say, my complaint was made-up and pedantic, and upon further reflection, I agree with you that it's a better analogy than I gave it initia

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      Is GitLab making any money?

  • They're a perfect Bubble 2.0 utility company (Score:5, Interesting)

    by ErichTheRed ( 39327 ) on Friday December 16, 2016 @01:29PM (#53498101)

    I'm heating 1999-2000 flashbacks. Back then, all the Internet "utility" companies like Sun, Cisco, the ISPs and the telecoms were spending money like crazy building lavish workplaces for all the dotcom kids with the money the VC firms were giving them. Same thing happened back then as is now -- there's a massive arms race to build the best, most all-inclusive employer out there to attract and keep the elusive people who happen to know the flavor of the moment. Remember, Google serves 3 meals a day, provides free bus service from Hipster Central in San Francisco, and basically operates a college campus. They're widely seen as the benchmark, and every tech company seems to be emulating them to as much of a degree as their funding will let them.

    GitHub's a perfect example of one of these utility companies. Slack, Atlassian, AWS, Microsoft (for Azure,) are also good examples. All of them make tools to let web developers crank out phone apps faster, which is the flavor of the moment, or provide infinite infrastructure to run the apps on. Traditional IT shops are also getting in on this trend, because GitHub and friends let CIOs push the magic DevOps button. All of a sudden, your siloed coders working on must-run applications in a mission critical environment switch into a Facebook-esque "move fast and break things" Agile model -- or so the Agile consultants tell them. I work in systems engineering/integration for a very staid company writing mission critical applications for an industry that is risk-averse, and our dev organization had the magic button pushed. I think this is one of the ways GitHub is making their VC money -- the VCs see that corporate executives will gladly write a check to tick the Agile box, and their toolset is seen as one part of it. Get all your developers working on Slack or HipChat as well and you're really cooking!

    We'll see what happens this time around when the bubble pops. I actually like a lot of the cloud computing, API-focused and agile development stuff, and I think IT is going to adopt most of it regardless of how critical the stuff they're writing is. But some of it is absolute nonsense outside of the sphere of web development companies writing throwaway apps for phones. Just like in 1999 though, if you can spell HTML, let the good times roll. The truly skilled will always survive.

  • My favorite line (Score:3)

    by chispito ( 1870390 ) on Friday December 16, 2016 @01:32PM (#53498129)

    The issue took on a new sense of urgency in 2014 with the formation of a rival startup with a similar name. GitLab Inc.

    The article fails to mention what Git is, or why one might reasonably expect a competitor to have "Git" in the name.

    • Re: (Score:2)

      by lgw ( 121541 )

      The nice thing about the web is you don't need to waste any column-inches explaining what git is - just make the first use of "git" a link!

    • Git is Linus Torvalds's name for Andrew Tridgell.

  • No surprise. The only ones who will end up making money in cloud technology will be the people hosting the cloud. All others will engage in a race-to-the-bottom in terms of pricing, simply because the cost to start a cloud company is minimal - but the cost to operate a cloud company is pretty static for all (AWS, Azure, etc), and there is ALWAYS someone who thinks they can do the startup cheaper and somehow break through the hosting costs (and fail, yet again, to do so).

  • It's worth noting that Amazon didn't post any meaningful profits until very recently; but the end game is clear: investing meant owning a share of overwhelming future economic power.

    Github is really convenient, especially for ad hoc projects, but I wonder what investors are getting. Investors want to own something but it would be trivial to move your code repositories to a different service. Amazon or Google could crush Github if it ever suited their purposes.

  • Hookers and blow? (Score:4, Insightful)

    by jxander ( 2605655 ) on Friday December 16, 2016 @03:03PM (#53498877)

    How is GitHub blowing through that much money??

    Look... I'm not saying they shouldn't be spending any money. I know server infrastructure has costs. But they lost 66mil in 9 months ... that means they SPENT at least 66 mil in 9 months. On what?? How much server do you need to host a text repository, with SVN and a website?

    And GitHub had been around for nearly a decade, so it's not like they were building a whole new server farm from scratch. That's 66 mil on salaries, maintenance and upgrades.

    • I can easily see spending $30M on sales to big clients (convincing IBM to give you a contract isn't cheap) and $30M to work on new features to try to avoid someone eventually offering a better alternative.

    • Salaries are probably a big one. If we assume an average cost of about $150k per employee per year, that's $67.5M for 600 employees in 9 months.

    • Only insightful-rated comment that even came close to the roots of the problem. The BitHub financial models are failing.

      Why doesn't anyone offer a project-centered cost-recovery system to fund the software people are willing to pay for? The hosting organization (AKA BitHub in this case) should EARN a percentage of the project funding my making sure the project proposals are complete, by evaluating the results against the success criteria, and by reporting the results to the donors (and the world). Complete

  • On GitHub becoming a critical SPOF (Score:3)

    by E-Lad ( 1262 ) on Friday December 16, 2016 @04:00PM (#53499299)

    The conveniences conveyed by GH are undeniable - ready-made code dev environments with widely-used issue and progress tracking, integration with other project management tools (zenhub, jira) and all in all eliminates and centralizes one's OSS and private project interests.

    However, as more and more Internet Infrastucture-ish projects have moved to GH, either completely or in major parts, I've become worried. OpenSSL, several Apache.org projects, some OSes (Linux, FreeBSD, illumos), and so on call GH their home now, or at least use it in some substantial way. Eggs in Baskets analogies apply, and given the security landscape of things now, one must at least pause and weigh the Pros and Cons of this centralized and trusted repo for so many important pieces of code.

  • on TV, so as an occasional, nonprofessional user, let me say: the user interface at GitHub is awful. You click a link that looks like a binary file ( with a .bin extension) and sometimes you get html, sometimes a binary file, sometimes a text file. Trying to figure out how to grab the stuff you need from GitHub is incredibly annoying. That's all I have to say about it.

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