Same conclusion…ex pricing increases (plural, sorry…), NRR was flat.
@wsm007 Sorry to beat a dead horse, but I still don’t like you adjusting NRR without the details. So if you are going to, I must note the 29%/33%/40% you backed out is the entire price yield, not just the price increase you are attempting to isolate. You are including the price discounting that disappears in later contract years in your calc that has always been a part of NRR contribution.
He said the price breakout is both factors at MS TMT:
And the other 40% is increased price yield. … So it’s comprised of increased yield per customer [removing initial year discounting] as well as the premium price increase [the part you want to track], and that was roughly about 40%
Notice in my example, I tried to isolate just the price increase by removing the price yield contribution reported in Q4/Q1 before the price increase really kicked in, noted as 25%.
So I roughly calced 40% impact for price yield now - 25% where it started = 15% from price increase alone, taking NRR 130% (30pp * .15 = 4.5pp) down to 125.5%.
That is a long way from your calc of 118%! You are double penalizing them by removing the other pricing factor too. Their own metric shows the NRR went up +2pp in Q4 … and somehow you are staying it went down (118.8 to 118).
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@laneylawyer
Microsoft did indeed report incredible numbers for GitHub recently.
- GitHub revenue growth accelerated again, from +35% in Q2 to +45% in Q3.
- GitHub user sub growth accelerated again, from +30% in Q2 to +35% in Q3.
Despite the competition from TEAM and FROG, this is mostly a 2 horse race in DevSecOp.
I would normally agree with your “rising tides lift all boats”, but it’s clear the uplift in GitHub is from the raging success of GitHub Copilot, their AI code assistant.
Microsoft is winning right now from their early entry thanks to Open AI partnership. But this is now an area with a lot of AI model and product competition, including from GitLab, AWS, GCP, Replit, Tabnine, StarCoder, etc. I think there is room for GitLab to shine as the shine comes off GitHub Copilot as all these new competitors get equal in code quality.
GitLab is trying to not only catch up to the code assistant and chatbot, but is also trying to surpass them, by pushing AI all over the dev processes over software lifecycle. (GitHub is now starting to move this way too.). GitLab is leveraging Google Codey API (over Gemini) to move faster in these directions, along with Anthropic Claude and Mistral to some degree.
I understand the sentiment about competiting w/ Microsoft… but CrowdStrike and Okta are both great examples of success against the tech giant. (Slack and Zoom too, but now having difficulties as Microsoft focused more on Teams.)
In GitLab’s favor is how it has support from GCP and AWS to succeed due to Microsoft owning GitHub. GCP in particular is tightly integrating about 1/2 of GitLab’s stack inline with their own DevOps tools and app stack infrastructure.
-muji
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