Any attempt to use revenues as justification of the valuation is missing the point, also comments regarding git hosting being a commodity misses it.
The valuation imho is a bet that GitHub will be ingrained in developer's workflow and continue to occupy developer mindshare for at least the next decade. Some reasons have already been mentioned in the comments here:
* Revenues - It's already the dominant player in git hosting and has better enterprise plans,
* Mindshare - GitHub is not just git hosting, it's wikis, issues, gh-pages, atom, and more to come. Each of them are good products in their own right and also create a lot of value by being under the same roof.
* Platform - Github is no longer a product, it's an emerging platform. There are plugins / extensions that augment the power of GitHub; zenhub.io (as someone mentioned here) - a case in point.
And one point that every comment here has missed is Github's value as a latent hiring marketplace. Unlike LinkedIn / Resumes / Referrals, a github profile is a much better signal for an employer. Punchcards, followers, projects built and contributed to build a very comprehensive visual of a developer, his coding style, tools used. As Github gets more popular, more employers will find value in this providing a reinforcing loop getting more developers to be creating profiles and maintaining them.
>The company itself has passed 200 employees worldwide, with big plush offices in Denver, New York, and London, and dozens of amazing people who work from the comfort of their own homes. (By the way, if 200 people seems like a lot, keep in mind that more than half of them are working on Stack Overflow Careers).
>We could just slow down our insane hiring pace and get profitable right now, but it would mean foregoing some of the investments that let us help more developers.
Which implies they are making a few bob from careers etc if they could slow hiring and be profitable with 200 employees.
Atlassian do have products that cater to non-programmers as well, like Jira, HipChat, Confluence and some service desk application. I think Atlassian would naturally be worth more than GitHub, simply due to the larger potential user base.
I don't think we know what profits either company has, and without that information it's hard to know if the valuations are realistic.
how convenient it would be if GitHub could host the repositories you have with the press of a button. I'm betting the investors have seen the success of AWS and think GitHub could capitalize on the convenience of lumping everything together.
The valuation imho is a bet that GitHub will be ingrained in developer's workflow and continue to occupy developer mindshare for at least the next decade. Some reasons have already been mentioned in the comments here: * Revenues - It's already the dominant player in git hosting and has better enterprise plans, * Mindshare - GitHub is not just git hosting, it's wikis, issues, gh-pages, atom, and more to come. Each of them are good products in their own right and also create a lot of value by being under the same roof. * Platform - Github is no longer a product, it's an emerging platform. There are plugins / extensions that augment the power of GitHub; zenhub.io (as someone mentioned here) - a case in point.
And one point that every comment here has missed is Github's value as a latent hiring marketplace. Unlike LinkedIn / Resumes / Referrals, a github profile is a much better signal for an employer. Punchcards, followers, projects built and contributed to build a very comprehensive visual of a developer, his coding style, tools used. As Github gets more popular, more employers will find value in this providing a reinforcing loop getting more developers to be creating profiles and maintaining them.