GitLab, the increasingly popular DevOps platform, today announced a major update to its subscription model. The company is doing away with its $4/month Bronze/Starter package. Current users will be able to renew one more time at the existing price or move to a higher tier (and receive a significant discount for the first three years after they do so).
The company’s free tier, it is worth noting, is not going away and GitLab argues that it includes “89% of the features in Bronze/Starter.”
As GitLab founder and CEO Sid Sijbrandij told me, this was a difficult decision for the team. He acknowledged that this is a big change for those on the Bronze plan. “I hope that they see that we we did our homework and that we have great legacy pricing,” Sijbrandij said, and added that the company will listen to feedback from its users.
To ease the pain, Bronze users will be able to renew their existing subscription before January 26, 2022 for an additional year at the existing price. They can also opt to move to the Premium tier at a discounted price for the next three years, starting at $6/user/month in Year 1, but that price then goes up to $9/user/month and $15/user/month in Year 2 and 3 respectively. For new users, the Bronze package is no longer available, starting now.
In the end, this was a purely financial decision for GitLab. As Sijbrandij told me, the company was losing money on every Bronze-tier customer. “The Bronze tier, we were selling at a loss,” he said. “We were just losing money every time we sold it — just on hosting and support. To be a sustainable business, this was a move we had to make. It’s a big transition for our customers but we want to make sure we’re a sustainable company and we can keep investing.”
Sijbrandij told me the team looked at increasing the price of the Bronze tier to make it profitable. “We looked at all options, but in the end, you’re going to have an offering that is very similar to Premium. It would be too much overlap between the two,” he explained.
With this change, GitLab now offers three tiers: Free, Premium and Ultimate (it’s also doing away with the “Silver/Premium” and “Gold/Ultimate” naming).
The free tier, which in terms of total users is the most popular plan on GitLab, will remain in place. While it is surely a loss-leader for GitLab, it only comes with limited CI/CD credits and doesn’t include any support options, so the overall loss here must have been worth it for the company. Sijbrandij also noted that, as an open core company, having a free and open offering is simply a must.