 Thank you for that introduction Jim. I feel really small By the way, if you were all remote companies say if you want to swipe our handbook like Jim did Go ahead. It's creative comments. So it's totally cool So I'm gonna talk today about commercial open source business models And then specifically about how any age of hyper clouds we bet on buyer based open court A little bit about me My name is C. C. Bromley and if you can't pronounce that that's totally fine. I'm a co-founder and CEO at GitLab and GitLab is a commercial open source software company and What's unique about GitLab is that we're the first single application for the entire DevOps lifecycle So in a single application you can go from planning to do something Creating that in a web IDE running the test looking at the performance of your site Packaging that up securing all that with static and dynamic tests and dependency and container scanning Releasing that out through incremental rollouts Configuring that operating that Monitoring what the result is with metrics and logging and defending that against attacks now That approach has been amazingly successful We incorporated in 2014. We were five employees at the time We're now over 500 people In 50 countries all remote all working from the location. We prefer And GitLab is in use with millions of users with more than 100,000 organizations But I think the number I'm most proud of on this slide is that we have over 2000 people who contributed backcode to GitLab As we've grown as a commercial company We've been able to keep the community with us and every month there's more than a hundred Improvements in GitLab that come from the wider community There should be a lot of familiar logos on this slide one one of our customers. I'd like to highlight is Goldman Sachs They went from releasing From from a cycle time from a time to determining to do something and then getting it out there of weeks to minutes It was such an improvement for the organization that they decided to invest in our last round of their own balance sheet And I think that's the most genuine compliment you can get from a financial institution I think the biggest challenge that commercial open source software companies face today is how to deal with the hyper clouds And we're seeing that they are so-called service wrapping commercial open source projects So you have commercial open source companies like confluence who make Kafka And then the hyper clouds offer take the Kafka open source code and offer that as a service Competing with the SaaS services that these companies were betting on to generate revenue The reaction of the commercial open source software companies Was the so-called non-compete licenses These are licenses that say hey, this is open You can use this You can you don't always anything you can do all the things you were doing while we were still open source But you cannot compete with us We will not allow you to offer a software as a service that competes with our offerings Until recently it wasn't clear. Is this open source or not on friday mongo db decided to retract their license from review by the open source initiative And I think now the consensus is that this is no longer open source open source means You can take the code and you can start competing with us And this no longer allows that The reaction to these licenses has been mixed I think many people Like these companies and what they've built and they wish them well they wish them They wish for them to do well And you understand they need a business model On the other hand, we also love open source And we love the lack of locking that comes at open source the ability to pack up our stuff and go elsewhere And that's A freedom that these licenses don't offer Now i'm also a business owner And at some point git lab might embrace one of these Non-compete licenses. I'm not saying no to them. I understand why these companies did it But so far we haven't And that's what I wanted to talk about today But before that something that happened yesterday There was a counter reaction and I think it was a really smart one aws Has customers and those customers were using the open version open source version of elastic search and elastic search Had is an open core model. They have both proprietary code and open source code And what amazon did is they forked and commoditized that So they offered an alternative distribution and in that distribution They took many of the features that people pay elastic search money for like encryption And they made that open source They went directly after the value that people pay elastic search for I think this is a very interesting development and we're going to see how this plays out But it's clear that commercial open source companies are now vulnerable to this fork and commoditize By the hyper clouds How do you get resistant? How do you resist getting forked and commoditized? I don't have all the answers, but here's some things We believe currently at git lab We believe it's more easy to be commoditized If some use cases are completely proprietary and some use cases are completely open source We think it's More easy to be commoditized if you have fewer proprietary features because it's easier to Replicate those We think you're more likely to be commoditized if your users work through an api If users work through user interface, that is hard to copy An api is a much more limited set of interactions And you saw amazon do this with mongo db amazon now has a mongo db compatible offering That doesn't use any of mongo db's source code on the back end They made it on top of harvora also because mongo db's agpl Amazoners hasn't been to use that license But if the interface is just an api It's much easier to get displaced than when you will have a richer experience with your user Another thing is the price sensitivity of your buyer If your buyer cares about saving money, they're much more likely to flock to an open source alternative for your product for your paid product And lastly If your users frequently contribute to open source, they're much more likely to open source the features that you ask money for Later in the talk, I'll show how buyer based open core Is on the right side of this. It's less likely to be commoditized But before that I want to go back a bit to how we found our business model We Kind of did it like everything we do at GitLab. We stumbled along We call that iteration And it started with so-called ice cream money The ice cream money were the donations that people send Dimitri Dimitri was living in the ukraine And he got about seven dollars of donations every month and he and his wife went out from that money and bought ice cream together At the highest point when we did a big drive It shows that i'm not jim because jim can get 10 million dollars I got a thousand dollars So that wouldn't even that A big drive couldn't even get the money to sustain Dimitri and Dimitri was living in ukraine and getting his own water from a well every morning So like even that didn't sustain him Then we tried consultancy. So we helped people to set up and upgrade GitLab The problem was the easier we made that the more we added to our documentation the fewer people wanted our consultancy services So we put ourselves out of a job Then we paid development. We said hey, there's so many people wanting new features in GitLab We'll make them for you just pay us and people signed up and said okay. I want to pay this much And then other people came in said I want the same feature. We said oh, we have good news There's another company that wants the same you pay half And then both of them went dead because both of them were waiting for the other to pay Worse than that. They said hey We have a preferred purchasing agreement with another company. They do all of our software development We'd like to contribute to feature. We're like, okay Well, they normally develop in java, but they can do ruby and go too And we ended up spending more time Getting their code up to snuff than we would have spent making the feature ourselves and we didn't get paid for it So that didn't work Then we tried support, you know who you're going to call GitLab But after a year most people haven't picked up the phone only once so they didn't use it. They canceled their subscription We tried packaging But we were a bit reluctant Red Hat does a great job with packaging But we wanted GitLab to be used by everyone We wanted to first of all large companies to use it like they do now but the problem was If you make your golden version your great version if you make the proprietary and you give everyone else a version that's behind and insecure You're not going to get that adoption We thought about the data play we thought about gitlab.com I started gitlab.com thinking this is the new sales force. This is going to be great But everyone was running itself managed So that didn't work. We tried a so-called single tenant service Your own GitLab server without any other people on it hosted by us Turns out that's a lot harder than it sounds at least for us We didn't even go the appliance route where we sold hardware and we didn't want to end up in jail So we didn't didn't do an initial coin offering We settled on open core like like most open source companies. It's a great business model. It's 90 plus percent margins It's almost old profit Then we had a much harder decision What is going to be open source? What is going to be proprietary? And you want some predictability there you want people to Say hey, I can predict ahead of time. What are you going to charge for? We try to do it based on the sdlc stage So like everything in create would be open source and everything in monitor would be proprietary It really hurt our adoption across stages We try to based on company size The bigger your company is the more likely you'll want certain features And we'll charge for those Didn't really work there weren't features that big companies wanted that small ones didn't Want so some small companies said why do I have to pay the big company price? I'm not a big company And the last thing we tried that didn't work was based on the maturity of the organization The more mature an organization. They want certain features that Companies just starting don't want the problem is our most expensive plans were for the very mature organizations But the customers more most willing to buy where people just starting with the digital transformation They needed the most help they were the most willing to pay so it didn't match with the willingness to pay And we settled on buyer based open core and I'll explain how that looks So we have four different editions of get lab our Open source edition our core edition is totally free and then we have three paid editions Ranging from four to ninety nine dollars per user per month Our most affordable edition is aimed at managers in the company Our most expensive edition is aimed at executives in the company So managers want things like automation and and stability and reliability The executives want want to have overview in their company. What's happening rope maps value streams security dashboards across the entire organization We also have kind of different ways of reaching people the free product the developer advocacy The starter product itself serve you sign up online The premium product in the middle. It's inside sales. You can talk with a salesperson, but in the end you sign up by the website The top one enterprise sales someone comes to buy your organization They bring along a solution architect And it takes a lot longer, but it's a much bigger ticket size so buyer based open core means Putting features and paid tiers and the type of persona that would buy determines where things go And the higher someone is in an organization The more you ask because the higher our people up the more budget they have And the three tiers it's pretty classic. You do good better best is your three variants of your product What's remarkable is that we have a big price difference between the tiers It's 5x which makes for a 25x price difference between the lowest and the highest paid offering And that helps us compete both at the bottom end of the market and at the high end of the market But you need a hybrid sales strategy to pull that off. You need different ways for people to purchase it purchase the product Now back to that initial slide Why does buyer based open core help? With being resistant to being forked and commoditized So You're less likely to be commoditized if you have more proprietary functionality And if you have that kind of interwoven in the application That's great because executives normally don't want something that nobody else wants They just want a better overview So almost everything has some kind of a dashboard or a company-wide overview that you can Get to executives You're less likely to be commoditized if you have more proprietary features well Executives turn out to have an unlimited supply of feature requests It is amazing what a complexity is of organizations at scale So there's always something new for us to add to the application You're less likely to be commoditized if you interact through the user interface, which is great Executives tend to use the web interface of GitLab and barely use the API You're less likely to be commoditized if someone is price insensitive Again, this fits really well. Executives tend to have budget authority They can afford to spend money on something that provides them value individual contributors frequently have to go to a big approval process before they can get something And lastly, are these people contributing to open source? You'd rather not have a paid feature Really demanded by people that contribute to open source here again. It works executives tend to not be active software developers So they're less likely to contribute it. So all of these things work out so that was What I wanted to tell we're a commercial open source software company We face a unique challenge from the surface wrapping by the hyper clouds We're right now betting on buyer based open core and we think it's more resistant to surface wrapping than the other Open core models. Thank you for your attention One thing I always admire about GitLab is like you also have like an incredible internal development velocity within your org Give us some secrets here. At least give me the secret. I think It's one of our values. We have two values that are very Different from other companies. That's iteration and transparency. Yeah, and that means we accept when things aren't Done the first time and it's very painful. I'll tell you an example. I just read a blog post about someone and he tested our features and he said Tracing in GitLab is not really good. It's just a link that goes to jager And he's right. That's the minimal thing we shipped and it feels very painful. Yeah, but guess what in the coming months We'll be piling on to that But that it's taking those small steps really rapidly That is the trick because every time you take a step you get feedback and you learn more about where you need to go There's less less coordination needed to take this the next step But you as an organization and as a person you have to be willing with we call it Oh, actually it's not treatments worked the CEO of github allowed me to say this He calls it living with a low level of shame. So that's one of our company values We iterate and we're very proud of our velocity. Yeah, it's so impressive. I tell you you literally can see GitLab at work because again, we we definitely troll your g-suite docs. We get ideas about to build culture It's so impressive. If you, you know, not only is the GitLab product awesome, but you really have to check out House is running the company. Huge respect. Thank you so much. Thanks again. All right. Thank you. Thank you