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MicrosoftGitHub-owned GitHub on Wednesday introduced a more expensive Copilot assistant for developers within companies that can explain and make recommendations about internal source code.
The launch could help Microsoft grow revenue in its cloud business segment by better taking advantage of partner OpenAI’s technology. It could better position Microsoft to meet the challenges of its main cloud rival. Amazon. In October, Amazon Web Services said it began testing the ability to customize its CodeWhisperer programming assistant with private code.
Microsoft was the first major tech company to release software that helped developers complete their lines of code, launching Copilot in 2021, using GitHub’s publicly accessible code collection. An experiment showed that developers using the tool worked 55% faster. In December 2022, GitHub started selling a business-oriented tier for $19 per person per month.
Last month, Microsoft CEO Satya Nadella told analysts on a conference call that GitHub Copilot had amassed 1 million paid users.
The new GitHub Copilot Enterprise costs more than double the business offering at $39 per person per month. Interested parties can join a waiting list ahead of a full release in February 2024.
“We’ve heard from a lot of customers that they want the ability to tune or customize Copilot on their codebase,” GitHub CEO Thomas Dohmke told CNBC in an interview earlier this week. Some customers even have their own special programming languages, he said.
On the GitHub website, people with Copilot Enterprise licenses can choose repositories to tailor Copilot to their own code. From there, they can ask GitHub’s Copilot chatbot about elements of existing code and suggest lines of code in development environments. Over time, Copilot will also be able to summarize code changes.
The price increase may seem significant. Stephen O’Grady, co-founder and chief analyst at industry research group Redmonk, called it “a huge bargain.”
Coding assistants like Copilot, Amazon’s CodeWhisperer, Duet AI from Googling and others from startups like Replit, Sourcegraph, and Tabnine promise to provide insights into multiple languages and frameworks at all hours of the day. Copilot is the most widely used AI coding system available, Dohmke said.
However, these systems are still in their infancy, with less than 10% adoption by enterprises, according to Gartner, a technology industry research firm.
In research reports, Gartner has advised customers to conduct their own evaluations of productivity improvements by coding assistants, rather than relying solely on the claims of software companies. The assistants made mistakes and raised concerns among security officials, Gartner said. GitHub, in turn, suggests that developers test, review, and audit the code that Copilot recommends.
But the additional knowledge of business code in Copilot Enterprise means advanced developers may be able to spend less time on procedural components, and junior developers can get up to speed more quickly, O’Grady said.
“If these systems save you an hour of developer time, do the math,” he said.
GitHub spoke Wednesday at its annual Universe conference in San Francisco about Copilot Enterprise and other updates, such as a Copilot affiliate program to add capabilities through integrations.
“Copilot provides incredible value to enterprises, incredible productivity gains, and the enterprise gets much more value from Copilot than the price reflects,” Dohmke said. The higher price factors in the additional cost of delivering the product to customers, he added.
Analysts at Piper Sandler estimated GitHub Copilot’s annualized revenue could reach $3 billion by 2026 in a note Monday, assuming 16% of GitHub’s 100 million users used it. The analysts’ model, which has the equivalent of a buy rating on Microsoft stock, did not take into account the impact of GitHub’s Copilot Enterprise.
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