How come everything is free?
I typed “free” into unsplash and this hilarious picture came up. That’s me typing npm…
tldr; freemium
I don’t mean - how come facebook and game apps are free? We know that’s data mining and micro-transactions, don’t we.
I mean all the useful software stuff. Just now, while downloading “Router” into my app built off “create react app” — and checking my node_modules folder, it suddenly occurred to me. This is free…
In my other careers, few tools were free. You have to pay for Photoshop and InDesign, you have to pay for Autodesk. You have to pay for ArcMap. You have to pay for Microsoft Word and Xcel.
Everything at Turing is free ! (except for Turing it$elf).
How come I can use GitHub, WebPack, Router, testing framekworks, Create React App, a million npm modules for free?
I researched, and some people on quora put in their two cents. Suggestions like “giving back to society” seem tenuous to me, so I did a bit of research on GitHub to begin understanding — free software.
To start, I tried a couple searches that yielded nothing:
Why is GitHub free? How is GitHub free?
Then I realized I was asking the question the wrong way. What I really wanted to ask was :
How does GitHub make money?
Here’s a quick GitHub timeline
2008 — founded in SanFrancisco by Tom Preston-Werner, Chris Wanstrath, and P. J. Hyett
First 6 months: GH hosted 10,000 open source projects
2012 — GH receives $100 million investment from Andreessen Horowitz (I don’t know Venture Capital companies —I figured it was a Dutch/Jewish fella. It’s actually a private VC firm founded by Marc Andreessen and Ben Horowitz)
2015 — Rival product, Google Code, shuts down
2017 — Rival product, Microsoft CodePlex, shuts down
2017 — GH receives series B funding, $250 from Sequoia Capital
Meanwhile — GH is pushing it’s business to included enterprise customers
2018 —GH generates annual revenue of $300 million. Microsoft acquires GH for $7.5 billion in stock
2019 — GH announces free users receive unlimited private repositories
2020 — GH announces all teams will also receive unlimited private repositories
- * Fun fact — China has it’s own version called Gitee. Read about it here(https://techcrunch.com/2020/08/21/china-is-building-its-github-alternative-gitee/)
Clearly GH is valuable. But HOW does it make money. Freemium, baby. This is common business strategy, you’ve seen it. You, user with lowly intentions, are entitled to partial use of the product in return for your e-mail address. Paying users receive more/better services.
Basically, if you start scaling your projects, you will need to step into one of the premium plans.
- Team — 4$/month
- Enterprise — $21/month
- GitHub One — pricing available upon request
There’s also the GitHub marketplace, where you can pay for apps that link to your GH.
But there’s more than money at stake here. The Harvard Business Review writes about the difference between financial and strategic value — and argues that Microsoft didn’t buy GitHub based on its revenue, but rather on GH’s ability to be a funnel into Microsoft’s developer environment.
So, that’s how it’s free. It’s so popular and useful, that it put Google and Microsoft’s version out of business, and a lot of people pay for it. But users aren’t necessarily paying enough for that to be the REASON Microsoft bought it.
Coming Soon…
I want to write more about Open Source next, TRULY free products and projects. This is for another time! Here’s a teaser:
Open Source
I use SO MANY open source tools. It’s dizzying. Wikipedia is one of the only organizations I’ve ever donated to. Even though I (and clearly most people) love open source technology, I cannot understand what keeps it afloat.Passion projects, sure — putting time and effort into something you either believe is societally important, or something you genuinely enjoy. But what I don’t understand is how large-scale passion projects survive over time. The lack of material compensation defies my understanding of human motivation.
