how-does-github-make-money

How Does GitHub Make Money? The GitHub Business Model In A Nutshell

GitHub provides web-based hosting for software development and version control using Git, which facilitates collaborative source code development among programmers. GitHub was founded by Chris Wanstrath, P. J. Hyett, Tom Preston-Werner, and Scott Chacon in 2008. Microsoft acquired the company for $7.5 billion in 2018, and it was integrated as part of Microsoft’s enterprise offering. On top of its free repository, GitHub also offers plans for teams and enterprise customers. And the GitHub marketplace also monetizes on some of the apps developed on top of it.

Origin Story

GitHub provides web-based hosting for software development and version control using Git, a program that facilitates collaborative source code development among programmers.

GitHub was founded by Chris Wanstrath, P. J. Hyett, Tom Preston-Werner, and Scott Chacon in 2008. In the following year, Github amassed over 100,000 users and hosted over 90,000 unique public source file repositories. It quickly earned a reputation as a popular resource, with tech companies such as Apple, Google, and Amazon known to frequent it.

In 2012, the company raised $350 million in funding and opened its first office outside of the United States in Japan. Six years later, GitHub was acquired by Microsoft for $7.5 billion.

GitHub revenue generation

GitHub work on a freemium model of revenue generation. Indeed, their value proposition is such that “anybody can host their software code on GitHub’s servers, and collaborate on it by multiple developers, teams, and organizations.”

As such, access to public repositories is both free and unlimited. For private repositories with a high feature set and customization level, a subscription fee is charged.

Subscription plans

Github offers four subscription plans for both individuals and teams:

  1. Free – a free-of-charge option for individuals and small businesses who require a minimal number of features and storage space. While the company does not make any money from this option directly, it uses the freemium concept to allow consumers to try before they buy, so to speak.
  2. Team ($4/month)
  3. Enterprise ($21/month)
  4. GitHub One – pricing available on request.

The latter three paid plans exist for those who want to scale projects with added features. Such features include more storage, secured sign-ins, and dedicated support. Many also opt for a paid plan to utilize Actions, or higher workflow automation minutes.

It’s also important to note that GitHub makes money whenever its customers exceed the limitations of their plan. For example, repository storage is charged at an extra $0.25 for every gigabyte over the stated limit.

Marketplace

GitHub Marketplace allows developers to enhance the functionality of the GitHub platform through third-party apps.

Apps are categorized according to code quality, continuous integration, monitoring, and project management. Some apps are free, while the company charges a flat or per-unit-used fee for others.

Given that these apps are provided by a third party, it is safe to assume that Github takes a percentage of whatever fee is charged.

Key takeaways:

  • GitHub provides a platform for software development and version control called Git. It was founded by four tech entrepreneurs in 2008 and quickly grew its user base in the succeeding years.
  • GitHub uses a freemium model supported by three paid subscription plans. Each plan offers a different feature set and level of functionality according to the needs of the user.
  • GitHub Marketplace allows third-party app creators to sell their products on the platform. The exact fee the company collects is likely a pre-determined percentage amount and is charged as a flat or per-unit-used amount.

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"