5 Ways to resist the threat of service-wrapping with buyer-based open core

GitLab, a commercial open source software business, faces the challenge of avoiding commoditization in the age of hyperclouds, where cloud providers like Amazon, Microsoft, and Google threaten open source businesses through service-wrapping. To address this, GitLab has adopted a buyer-based open core model, offering four software tiers tailored to different buyer personas, each priced according to the specific needs and budget authority of various organizational levels. This approach focuses on inserting proprietary functionality across most use cases, offering numerous proprietary features, providing interaction through a user interface rather than APIs, and targeting price-insensitive buyers who rarely contribute to open source. GitLab's CEO, Sid Sijbrandij, discussed these strategies at the Open Source Leadership Summit, highlighting their efforts to resist commoditization and ensure long-term viability.

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