GitHub, popularized by indie software developers, now books more than $100m a year from businesses

Key Points
  • GitHub's business-oriented products deliver more than half of the start-up's annualized revenue run rate.
  • GitHub will start providing customer support over the phone, and it's also adding recommendations about relevant repositories to the homepage for logged-in users.
GitHub's chief strategy officer, Julio Avalos.
Source: GitHub

After almost ten years, start-up GitHub has become essential to software developers, who use it to store code, keep track of updates and discuss issues.

GitHub is the rare instance of a successful "bottom-up" start-up, where individual users popularized the product before it penetrated into businesses. While plenty of independent coders still rely on it, GitHub now gets more than half of its revenue from businesses, the company told CNBC.

Speifically, GitHub's business products have a $110 million annualized revenue run rate, based on revenue in August from its GitHub Enterprise offering and code hosting on GitHub.com for businesses. (Run rate takes revenue from a recent period of time and extrapolates it out to one year, assuming no growth.)

As a whole, the start-up said in August that it had built up a run rate of more than $200 million based on its July revenue. That run rate is up more than 50 percent year over year, and that growth rate has been steady for the past few years, GitHub's chief strategy officer, Julio Avalos, told CNBC in an interview.

Today 52 percent of Fortune 50 companies use GitHub's Enterprise business tier, which costs $21 per user per month. Altogether, GitHub has more 23.1 million users in 200 countries and 1.5 million organizations. For context, IDC estimated in 2013 that the world had 18.5 million developers.

In the past few years, Google and Microsoft have both abandoned their online services for housing open-source code, further cementing GitHub's dominance. But there are other companies to contend with. The start-up GitLab, whose core code management software is available for free under an open-source license unlike GitHub, recently raised $20 million led by Alphabet subsidiary GV. And Atlassian, which fields a code-storage tool called Bitbucket that had 6 million users as of February, went public on the Nasdaq in late 2015.

While GitHub -- which now has around 700 employees -- has provided customer support over email for years, soon it will start handling inquiries over the phone, too, said Avalos, who's been with GitHub since 2012.

Additionally, the company is revamping its homepage for users who are logged in so that they'll see code projects that are relevant to them. That might seem like something a social network like Facebook would launch to boost usage among free users, but Miju Han, GitHub's engineering manager for data science, insists it could also be helpful at work.

"The new discovery features are relevant to enterprises because it's going to make developers much more productive," Han said. "When developers can learn much faster and that happens as part of their workflows, they're all better off."