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0 pointslox9y ago0 comments

Pricing is a function of what people will pay for it, not what it costs to make. Consider Slack as a fine example.

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z3t49y ago

I read an article not long ago that Github had to spin up three physical machines, just to handle one customer. Although it was an extreme example. Compared to slack, who could probably have a million users one a single machine, making it almost zero marginal cost per new user. While a user for Github means buying more hardware and a notable marginal cost.

If you for example are a reseller of commodity goods, you can't have a lower price then the price you buy it for. So you can't have a model of say unlimited goods for a monthly fee. And the price will most likely be based on per good.

jssjr9y ago

I think you're referring to the GitHub Engineering blog post [1] about our git storage tier. We [2] store your code on at least 3 servers, which is an improvement in many ways from our previous storage architecture. There are a lot of servers [3] powering things but not the millions it would require to give every customer three dedicated machines. Developing efficient solutions to problems is a requirement (and a fun challenge!) for anything at GitHub's scale.

[1] http://githubengineering.com/introducing-dgit/

[2] I'm a GitHubber. https://github.com/jssjr

[3] https://twitter.com/GitHubEng/status/730429227896463360

z3t49y ago

It was another post about someone using Github to host "packages".

loxOP9y ago

I'm not sure what your point is. Your initial comment seemed to indicate that you thought Github was increasing their pricing because they were struggling to pay for the underlying infrastructure, or that the per-customer cost was too high for the current margins. This is almost certainly not the case, they have simply realized that compared to similar services they are leaving a staggering amount of money on the table, and that people will pay a lot more. I imagine this pricing change will substantially improve their business in all regards.

z3t49y ago

You are correct. But if that is not the case, I think they are using the wrong strategy. Having such large margins will flood the market with competitors, lowering both market share and margins in the long run.

brianwawok9y ago

You realize Slack does full searching on your chat + your attached google drive? I would not be surprised for some big Enterprise customers to have 100GB of total data indexed.

Not saying the price is related to the cost, but I am not sure about the no marginal cost part.

j / k navigate · click thread line to collapse

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z3t49y ago

jssjr9y ago

[1] http://githubengineering.com/introducing-dgit/

[2] I'm a GitHubber. https://github.com/jssjr

[3] https://twitter.com/GitHubEng/status/730429227896463360

z3t49y ago

It was another post about someone using Github to host "packages".

loxOP9y ago

z3t49y ago

brianwawok9y ago

You realize Slack does full searching on your chat + your attached google drive? I would not be surprised for some big Enterprise customers to have 100GB of total data indexed.

Not saying the price is related to the cost, but I am not sure about the no marginal cost part.

j / k navigate · click thread line to collapse