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The Cost of Developers

stratechery.com

21–30 of 238 posts

Re: The Cost of Developers

#21

The author talks about leverage an OS provides to the vendor: iOS for Apple (and its App Store) and Windows for Microsoft. It is only logical that when your leverage fades, you should find an alternative means for growth. Microsoft has been betting on the cloud for some time now. Part of that strategy is shifting enterprise from premise to Azure. In parallel investing in developers. VS Code, .NET Core and now GitHub…

Azure have support for every shell you want, the problem isn't there.

My guesses are the late entry to the market, the widespread hatred to Microsoft (it's softening, but it's still there) and the half baked state of many of the services in the platform.

Re: The Cost of Developers

#22
> the App Store dramatically lowered the barriers to entry for developers

Is there any platform with higher barriers to entry than the App Store? iOS development requires a proprietary toolchain only available on Apple hardware, programming languages hardly used elsewhere, not to mention the $99/year developer fee and the litany of vague and arbitrarily enforced rules and content guidelines for App Store release.

Re: The Cost of Developers

#23

> the App Store dramatically lowered the barriers to entry for developers Is there any platform with higher barriers to entry than the App Store? iOS development requires a proprietary toolchain only available on Apple hardware, programming languages hardly used elsewhere, not to mention the $99/year developer fee and the litany of vague and arbitrarily enforced rules and content guidelines for App Store release.

Video game console development historically has often required thousands of dollars in special equipment and sometimes even a special relationship with the console manufacturer.

Re: The Cost of Developers

#25
post #13

There are times when I really like the thoughtful analysis on Stratechery and there are other times when I think it's a complete pile of detached-from-reality horsesh!t. Today is of the 2nd kind. What it also has is a potentially fatal weakness: no platform with user-based leverage. Sorry, what? Windows still has > 90% market share on desktop. If that isn't "user-based leverage" I don't know what is. This, by the way…

Github would have had trouble getting more VC investment. According to Bloomberg, there are ~21M software developers in the world, and Github has ~24M user accounts. There's little userbase growth possible there; they would have had to start increasing revenue per user rapidly to be interesting for another VC round.

Equally, on their $200M revenue (or whatever it was), they would struggle to get a multiple that would be interesting for their VC backers. Their market cap at IPO wouldn't have been much more than $1B (absent some growth story).

It's a great problem to have, to be sure, but the MS purchase is a great deal for Github investors.

Re: The Cost of Developers

#26
post #5

Great analysis, although I don't completely agree with this statement: "GitHub, a company that, having raised $350 million in venture capital, was not going to make it as an independent entity." If it is referring to the fact that, in the crazy VC spiral of the startups world, once you have received such a big investment, a sale to a big corp is the only choice, then I sadly agree. But GitHub could have been an indep…

Yes but given the opportunity, between retiring early with hundred of millions and keeping working for a few millions, most people will choose the former.

Re: The Cost of Developers

#27

> the App Store dramatically lowered the barriers to entry for developers Is there any platform with higher barriers to entry than the App Store? iOS development requires a proprietary toolchain only available on Apple hardware, programming languages hardly used elsewhere, not to mention the $99/year developer fee and the litany of vague and arbitrarily enforced rules and content guidelines for App Store release.

I'd never made an app, never written C#, and i got an app on the appstore within a few weeks and being downloaded around the world soon after. And that was 7 years ago before they made dealing with all the certificates not insanely annoying. If that's not a low barrier to entry i don't know what is.

In a way the barrier has increased recently with a lot of new requirements for apps (designing for the notch etc) and appstore listings and worrying about privacy policies etc.

Re: The Cost of Developers

#28
post #5

Great analysis, although I don't completely agree with this statement: "GitHub, a company that, having raised $350 million in venture capital, was not going to make it as an independent entity." If it is referring to the fact that, in the crazy VC spiral of the startups world, once you have received such a big investment, a sale to a big corp is the only choice, then I sadly agree. But GitHub could have been an indep…

Correct, github sold out to investors, which then owned them, which then sold them out to get an exit when it turned out the company was in no shape for an IPO which is the only reasonable other exit if you are looking for a 10x ROI on a company that burned through hundreds of millions. Investors were in this for a huge exit and they just got it. In fairness, MS bought a valuable social network of essentially the entire OSS and developer community.

As an independent entity, Github would have had to evolve in a very different way and gone more aggressively after making money, fixing their cost structure, like most of their competitors like Atlassian, Gitlab, and other companies selling developer tools as a SAAS service. So, even though these are comparable companies with comparable offerings, the value proposition is very different. There is no way in hell Gitlab is worth anywhere near what MS just paid for Github.

Being based in silicon valley means Github paid a premium for being there and burned through loads of cash paying for expensive developers, fancy office space, etc. Much cheaper if you are based elsewhere, have less emphasis on wanting to have every OSS project on your platform and more emphasis on selling tools to corporations. This is in a nutshell the strategy for Atlassian and Gitlab. Both also offer freemium layers for OSS but mostly their deal is upselling to their paid offerings. Growth that way is much slower. Though, I would say, Gitlab is now pretty well positioned to succeed where Github struggled.

Re: The Cost of Developers

#29

Earlier quoted context omitted.

Same here. I think there's another reason that's not so apparent

Cultural reasons maybe. The Ruby/Rails community Github is also part of fits into the overall strategy of cultural change towards a more design and UX centric brand, that is recognized and respected by other designers beyond being just a tool for CAD modeling.

Here is what I don't get. It is far easier for github's dev community to move to an alternate than Facebook users. Unless there is revenue to back it up, I don't understand the 7.5 Billion price tag. Heck .. Docker for 10 Billion might have been plausible. What are the barriers to another entrant?

This acquisition reminds me of the Minecraft acquisition. It did not make financial sense to me either. If Nadella keeps this up, he will eventually have issues with shareholders.

Re: The Cost of Developers

#30

> the App Store dramatically lowered the barriers to entry for developers Is there any platform with higher barriers to entry than the App Store? iOS development requires a proprietary toolchain only available on Apple hardware, programming languages hardly used elsewhere, not to mention the $99/year developer fee and the litany of vague and arbitrarily enforced rules and content guidelines for App Store release.

Video game console development historically has often required thousands of dollars in special equipment and sometimes even a special relationship with the console manufacturer.

Good point. So if our point of comparison is video game consoles, the barriers to entry have indeed been lowered. But is that the right point of comparison?
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