Rewriting the code: The commercialisation of computer code collaboration – The Financial Express

In the mobile world where Microsoft was forced to exit the business, operating systems are tightly controlled by Apple and Google.

By Siddharth Pai

Operating systems like Windows or MacOS are platforms which run on computers which allow the user to install other programs on the computer, such as Microsoft Word or Excel. Their equivalents in the mobile world are Apples iOS and Googles Android. These are closed operating systems, meaning that updates to the platform can only be provided by the original makers of the systems Microsoft in the case of Windows, Google in the case of Android and Apple in the case of MacOS and iOS.

In the mobile world where Microsoft was forced to exit the business, operating systems are tightly controlled by Apple and Google. Other companies, including the Chinese Huawei, have tried to create alternatives but the lead enjoyed by the market leaders is too great for upstarts to make meaningful inroads.

In the world of the computer and cloud networks however, things are different. In September 1991, Linus Torlvalds, created a family of open source operating systems kernels that were similar to Unix, a prevalent operating system at the time for multi-user computing. Being open source, Linux gained quick popularity with computer programmers who wanted to write programs independent of closed operating systems, and since 2004, Linux has been able to run on Windows based operating systems. It also runs seamlessly on Macs and other hardware.

Some years ago, Torvalds also created a programming language called Git, which was first envisioned to get around the difficulties of making Linux and Windows work together. I will save you the technical explanation of exactly how and why Torvalds created Git and will instead focus on the open source world. Both Linux and Git allow for a great deal of collaboration among programmers. Strangely, but also understandably, programmers feel a need to share their more elegant pieces of programming code with the world at large and a language like Git allows them to create these and share with ease.

Unsurprisingly, Silicon Valley entrepreneurs have looked to monetise these repositories of computer code in Git. GitHub is the best known of these. Founded in 2008, it is a provider of internet hosting for software development environments using Git. By 2018, its revenue was north of US$ 200 million a year, and the platform had tens of millions of subscribing users. Unsurprisingly, it was bought by Microsoft in 2018 for a kings ransom$7.5 billion. Sometimes, the best way to deal with upstart potential competitors is to buy them out.

Meanwhile, a minnow in the field, GitLabwhich was direct competitor to GitHubstayed independent. It debuted last Thursday on the NASDAQ and its current value is in the region of US$ 16.5 billion. It appears that the Covid boom era of tech IPOs has been kind to yet another minnow debutante. GitLabs current value is over twice what the much better funded GitHub was able to collect from Microsoft in 2018. Very interestingly for a pre-Covid enterprise, GitLab was founded as a fully remote company with no headquarters. It had no real estate. All employees across the globe supposedly had equal access to information. GitLab has an online handbook, now consisting of over 2,000 web pages. The handbook defines in detail how the company operates, covering engineering, finance, marketing, hiring, compensation, benefits, stock options, and of course, remote work.

Some time ago, I had written that IT services firms, as we have come to know and accept them, will inexorably become outmoded models. Publicly available platforms are being increasingly used for the requisitioning and delivery of services. The cost of software development is ever decreasing with re-usable code libraries such as those available on GitHub and GitLab. A large amount of software development today is done with the use of free open-source libraries.

Also, the contracting cost around buying and selling software and business services is plummeting. Indian offshore services are now de rigueur at most organisations in the US and other markets. This calls into question whether services firms need to act as a nexus of contracts as they have done so far or whether the future will be one where services firms increasingly become simply a platform for buyers and sellers to collaborate. The platform will itself only provide a few signature processes such as quality control and the programmers availability that all participants in the services market (buyers and sellers) will agree to.

Until now, we have seen the rise of a marketplace-oriented business culture only among less skilled service workers such as cab drivers and couriers. Still, they provide an interesting sociological test bed for the future, as these marketplace forms of organization begin to replace the current dynamic of employer-to-employee relationships. It is now evident to me that we are much closer to that future. While Indias IT services companies have grown smartly during Covid, the supply-side problems of finding quality IT talent have increased several-fold. There is an intense war for talent with five to ten years of experience. Pay packets are skyrocketing. Many IT employees, who have now grown used to working remotely, are unwilling to submit themselves to horrendous commutes and regimented workplaces and are either refusing to come back int into their offices or voting with their feet.

The industry is ripe for disruption by a player who can provide a platform for most IT services. Git repositories will help.

The author is Technology consultant and venture capitalistBy invitation

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know markets Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Here is the original post:
Rewriting the code: The commercialisation of computer code collaboration - The Financial Express