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.

Business Model Element	Analysis	Implications	Examples
Value Proposition	GitHub’s value proposition centers on providing a collaborative platform for software developers to build, share, and manage code repositories. It offers version control, project management tools, and a community-driven environment. GitHub emphasizes collaboration, transparency, and open-source principles, allowing developers to work together and contribute to a global coding community.	Offers a collaborative platform for developers to build and manage code. Facilitates version control and project collaboration. Promotes open-source principles and a sense of community among developers. Attracts developers seeking a platform for code hosting, collaboration, and contributions. Fosters transparency and accountability in software development.	– Developers use GitHub to host code repositories, track changes, and collaborate on projects. – Open-source projects benefit from GitHub’s platform by engaging with a global community of contributors. – GitHub emphasizes transparency through features like issue tracking and project management tools. – Developers looking to showcase their work and collaborate on open-source projects use GitHub to build their profiles and contribute to the community.
Customer Segments	GitHub serves a diverse customer base, including individual developers, software development teams, open-source projects, and enterprises. It caters to coders from various industries and skill levels, offering tools for both small-scale projects and large-scale software development efforts. GitHub’s global reach attracts users from around the world.	Addresses the needs of individual developers and software teams. Supports open-source projects and global developer communities. Attracts users from various industries and skill levels. Provides tools for projects of all sizes, from small personal repositories to enterprise-scale development. Offers a global platform connecting developers worldwide.	– Individual developers use GitHub to host personal projects, showcase their work, and collaborate with others. – Open-source projects leverage GitHub’s platform to manage code contributions from a global community of contributors. – Software development teams use GitHub for version control, project management, and code collaboration. – Enterprises adopt GitHub for large-scale software development and collaboration among distributed teams.
Distribution Strategy	GitHub’s platform is primarily accessed through its website and desktop applications. It offers both free and paid subscription plans, with enterprise-focused offerings. GitHub fosters community engagement and growth through integrations, partnerships, and its ecosystem of third-party applications (GitHub Marketplace). The platform also provides educational resources to developers.	Ensures accessibility through its website and desktop applications. Offers free and paid subscription plans, including enterprise solutions. Attracts users through integrations and partnerships with third-party applications. Encourages community engagement and growth through GitHub Marketplace. Provides educational resources to support developers. Offers self-hosted enterprise solutions for added control.	– Developers and teams can access GitHub’s platform through its website or by downloading desktop applications. – Free plans are available for individual developers, while paid plans cater to teams and enterprises with additional features and support. – GitHub Marketplace offers a wide range of integrations and tools that enhance the development workflow. – Educational resources like GitHub Learning Lab help developers improve their skills and contribute to open-source projects. – Enterprises have the option to use GitHub Enterprise, a self-hosted solution that offers added control and security.
Revenue Streams	GitHub generates revenue primarily from subscription plans, including paid individual, team, and enterprise plans. It also offers GitHub Enterprise Cloud and GitHub Enterprise Server for large organizations. GitHub Marketplace, where third-party developers offer their applications and services, contributes to additional revenue streams.	Relies on subscription plans as a primary source of revenue. Offers enterprise solutions for large organizations. Earns income from third-party applications through GitHub Marketplace. Provides advanced features, security, and support for paid users. Diversifies income through various revenue streams.	– Individual developers, teams, and enterprises subscribe to GitHub’s paid plans to access advanced features, security, and support. – GitHub Enterprise Cloud and GitHub Enterprise Server cater to the needs of large organizations with self-hosted solutions. – GitHub Marketplace generates revenue through commissions from third-party applications and services. – Diversified revenue streams provide stability and growth opportunities.
Marketing Strategy	GitHub’s marketing strategy includes content marketing, developer community engagement, partnerships, and events. It emphasizes the power of collaboration, open source, and the benefits of version control. GitHub actively participates in developer communities and hackathons, fostering a sense of belonging. The platform promotes educational resources to help developers improve their skills.	Utilizes content marketing and community engagement to reach developers. Emphasizes collaboration and open-source principles. Actively participates in developer communities and hackathons. Partners with organizations and promotes events. Offers educational resources to support developer growth. Attracts users seeking a platform for coding, collaboration, and learning.	– GitHub’s blog, webinars, and documentation provide valuable resources and insights for developers. – Engaging with developer communities and hackathons showcases GitHub’s commitment to the coding community. – Partnerships with organizations and participation in events raise GitHub’s visibility among developers. – Educational resources like GitHub Learning Lab help developers improve their coding skills and contribute to open-source projects.
Organization Structure	GitHub operates with a centralized structure overseeing product development, marketing, and customer support. It collaborates with a global community of developers who contribute to open-source projects hosted on the platform. GitHub maintains a strong developer relations team to engage with the coding community and foster a sense of community and belonging.	Employs a centralized structure for product development and support. Collaborates with a global community of developers and open-source projects. Fosters a strong developer relations team to engage with the coding community. Encourages a sense of community and belonging among users. Provides tools and features to support collaborative coding and project management.	– GitHub’s product development teams work on improving the platform’s features and capabilities. – A global community of developers contributes to open-source projects hosted on GitHub. – GitHub’s developer relations team actively engages with developers, fostering a sense of community and support. – Features like issue tracking, pull requests, and project management tools enhance collaboration among users.
Competitive Advantage	GitHub’s competitive advantage lies in its robust platform for version control, code collaboration, and project management. It fosters a strong developer community and encourages open-source contributions. GitHub’s extensive ecosystem of third-party applications and integrations enhances the development workflow. Its global reach and user-friendly interface attract developers and organizations worldwide.	Offers a comprehensive platform for version control and code collaboration. Attracts a global community of developers and open-source projects. Provides a wide range of third-party applications and integrations. Fosters transparency and open-source principles. Empowers developers to work together and contribute to a global coding community.	– GitHub’s platform is recognized for its reliability and features like branching, merging, and code reviews. – A strong developer community contributes to a wealth of open-source projects hosted on GitHub. – GitHub Marketplace offers a broad range of integrations and tools that enhance the development process. – GitHub’s global reach connects developers and organizations from around the world, facilitating collaboration and knowledge sharing. – User-friendly features and a streamlined interface make GitHub accessible to developers of all skill levels.

Table of Contents

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.”

Subscription plans

Github offers four subscription plans for both individuals and teams:

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.
Team ($4/month)
Enterprise ($21/month)
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.

Key Highlights

Origin Story: GitHub was founded in 2008 by Chris Wanstrath, P. J. Hyett, Tom Preston-Werner, and Scott Chacon. It offers web-based hosting for software development and version control using Git.
Value Proposition: GitHub allows developers to collaborate on source code development using its hosting and version control services. It has become a popular resource for tech companies and individual programmers.
Acquisition by Microsoft: In 2018, Microsoft acquired GitHub for $7.5 billion, integrating it into its enterprise offering.
Freemium Revenue Model: GitHub’s revenue model is based on a freemium approach. Public repositories are free and unlimited. Private repositories with advanced features require a subscription fee.
Subscription Plans: GitHub offers four subscription plans:
- Free: Basic features for individuals and small businesses.
- Team ($4/month): Enhanced collaboration and features for teams.
- Enterprise ($21/month): Scalable solutions for larger organizations.
- GitHub One: Customized plans with pricing available on request.
Additional Usage Charges: GitHub makes money when customers exceed the limitations of their subscription plan. Extra storage, for instance, incurs an additional fee.
GitHub Marketplace: The platform hosts third-party apps on its marketplace, enhancing GitHub’s functionality. Apps are categorized by purpose, and fees are charged based on flat rates or per-unit usage.
App Revenue: GitHub likely earns a percentage of the fees charged by third-party app creators on the marketplace.
Scalability and Customization: Paid plans offer more storage, security, dedicated support, and workflow automation minutes. Users often opt for paid plans to access these enhanced features.
Support for Developers and Teams: GitHub’s services cater to both individual developers and teams, offering collaboration tools, version control, and code management.
Microsoft Integration: Following its acquisition by Microsoft, GitHub became part of Microsoft’s broader ecosystem and enterprise solutions.
Continued Growth: GitHub continues to be a preferred platform for developers and companies worldwide, contributing to its sustained growth and revenue generation.