This week GitLab announced a pricing change that eliminates its Bronze/Starter tier in favor of a three-tier subscription model. The Starter tier, previously offered at $4/month, included features like single-team project management, next day business support, and 2,000 CI/CD minutes.
GitLab Pricing prior to Jan 26, 2021 Update
GitLab’s updated pricing page shows the benefits that were included in the Starter plan are now only available in the Premium tier at a 5x price increase, introducing a larger gap between free accounts and paying customers. The change specifically impacts those who were happy to pay for a few extras but don’t need the full array of premium features.
GitLab is offering to transition customers at a discount, where existing customers have the option to renew at the current price for an additional year or upgrade to Premium at a discount. The company also makes a case for the free tier, which it says includes 89% of the features in Bronze/Starter, with 450 new features added last year.
“The Bronze/Starter tier does not meet the hurdle rate that GitLab expects from a tier and is limiting us from investing to improve GitLab for all customers,” GitLab co-founder and CEO Sid Sijbrandij said. “Ending availability of the Bronze/Starter tier will help us accelerate development on customers’ priority needs such as improving usability, availability, performance, and delivering enterprise-grade security and compliance.”
It makes sense that GitLab is turning its attention to factors like “hurdle rate,” as Sijbrandij told CNBC that he’s still looking to take the company public after a late 2020 employee share sale, which valued the company at $6 billion. GitLab passed $150 million in annual recurring revenue in 2020, but is tightening up its subscription model as the company tailors commercial offerings for those who need DevOps features.
GitLab did not share the pricing update announcement on Twitter, perhaps in anticipation of how controversial it would be. The company posted the link in the GitLab forums where customers expressed disappointment in the change.
“We are currently paying Bronze level because there are some features that we find interesting,” Riccardo Padovani said. He specifically referenced issue weights, iterations, multiple issue assignees, and issue dependencies.
“These features are now in the premium level. We were not interested in the previous ‘silver’ level. On the long term, this is basically a 5 times price increase. Being a vocal supporter of GitLab in my company, I am not happy about this, at all.”
One customer said the change “feels like a bit of a kick in the teeth,” while another noted that GitLab’s mid-tier offering costs just one dollar less than GitHub’s enterprise plan. Many of GitLab’s existing Starter tier customers have a large number of users who are not developers and do not have access to code or pipeline features. They are supporting staff who check bug reports or project management teams that create issues. Without the ability to pay per user role, upgrading every seat in the team to Premium doesn’t make sense for these types of use cases.
Customers who had recently convinced their organizations to go with GitLab, along with those who have invested time developing processes around the Starter tier features, are some of the most vocal opponents to the change. Some found the announcement off-putting, as it made it seem like paying Starter plan customers were actually costing GitLab money, requiring the tier to be eliminated. Many expressed that they only signed up for the tier to support GitLab and that they only used a handful of the features.
“It’s worth pointing out that you say that ‘many Bronze/Starter customers adopted Gitlab just for source code management,’ – yes – that’s exactly what we use Gitlab for,” one customer said. “We don’t use CI, Issue Tracking, or any other features offered even in the free version, but we do want to have a couple of the SCM features offered in the Bronze/Starter tier. Do you really think that customers like us that are only looking for SCM are going to pay more for unnecessary features?”
The GitLab employees in the thread seemed ready to defend the decision against the onslaught of criticism. While a few said they will take customers’ concerns and feedback under consideration, most were prepared to assure critics that the decision was made “through extensive research,” which likely leaves those most affected further alienated, if the 5x cost increase didn’t already make the decision for them. Bronze/Starter tier customers who are still examining their options can find the various transition paths in the pricing change announcement.