Some of it is on-prem. Some of the new features are SaaS provided in the cloud and kind of gradually move those customers over.
Robbie Owens: Great. Thank you.
Sid Sijbrandij: Thanks, Rob.
Sharlene Seemungal: Next, we have Koji from Bank of America.
Koji Ikeda: Hey, guys. Thanks for taking the question. I wanted to ask about the analyzed category. When I looked at the investor presentation, it looks like this is a new category on the product page in the investor deck, and I really wanted to focus on the metrics logging and tracing. And I guess could you categorize what type or maybe category of vendor would you be competing with this product? And why would a customer go at GitLab for metrics, logging and traces versus maybe some of the other traditional vendors in that category? Thank you.
Sid Sijbrandij: Yes. Thanks for the question. So specifically the metrics logging and tracing. I think that’s called the APM category, application performance management and popular vendors there are vendors like Datadog and New Relic. So over time, we’ll be competing with them. But in the beginning, we’ll start — the features really basic with just very early functionality. So we’re not as much competing with the big vendors. We’re competing with nonconsumption. The alternative to GitLab would be just not setting up logging and metrics and things like that because the features we offer in the beginning is really — are really basic. But because of our open core model where our customers can contribute — over time, they will start contributing.
Our last monthly release, GitLab 16.3 in August, it had 237 contributions from our customers across the platform. So over time, over many years, the functionality will improve, and the goal is to become best-in-class over time and compete with those best-in-class solutions.
Koji Ikeda: Just one follow-up, if I may there. You mentioned APM just thinking a little bit further out, would there be any plans to maybe go into infrastructure monitoring or log analytics too. Thanks, Sid.
Sid Sijbrandij: Yeah. If we do logging, logging analytics makes sense to me as a category. If you look at infrastructure, we already have infrastructure scope functionality. For example, our TerraForm (ph) support. So certainly something that has our attention.
Sharlene Seemungal: Next, we move on to Derek from Cowen.
Derrick Wood: Great. Thanks, guys. You’ve talked about vendor consolidation as a key opportunity for GitLab for some time. That theme has definitely popped up more across the software landscape since the macro hit over the last few quarters. Just wondering if that kind of cadence of business for you guys just picked up, if you have any metrics to share at all in terms of like a percentage of expansion business growing in terms of vendor displacement? And then I have a quick follow-up.
Sid Sijbrandij: Yeah. Thanks for that. I’ll let Brian add to my answer, but I think what we’re seeing is that the market is starting to get it. And I think the introduction by Gartner and Forrester of this category of DevOps platform is going to be a real tailwind for us because it signifies to customers like this is the future. If you look at our 2022 state of DevOps report, 69% of organizations said they wanted to consolidate tool chains, but they don’t want to compromise on functionality. So as GitLab gets more complete and is able to take on more point solutions, that is an amazing trend that the customers want to consolidate. Now the analysts are saying it, and we hope to go from kind of the early adopters to the early majority in that. Brian?
Brian Robins: Yeah. And just to say a couple of extra words to what Sid said is absolutely. I think we’re seeing this sort of in the customer journey, if you will. And so they’re landing on premium, they’re landing relatively small, they’re actually then expanding to division departments within the company then ultimately upgrading Ultimate. And so the customer journey continues to show. Despite the macro when you think that people wouldn’t be selecting a new technology or a new platform, this has really caused people to evaluate how they’re developing software and exploring ways to make software better, faster, cheaper and more secure. And so I think what Sid said as well as what we’re seeing just from a customer perspective is, we’re continuing to see the vendor consolidation.
Derrick Wood: Great. And just a follow-up is last quarter, you guys talked about more C-level involvement in purchase decision-making. Just curious how you’ve maybe tweak the go-to-market to adopt to that environment, especially in light of kind of a new leadership in place and maybe what kind of tweaks you’d be looking in the second half of this year?
Sid Sijbrandij: Yeah. We don’t have any major disruptions plan. It’s been a very seamless transition in our go-to-market. But we are focused on those C-level buyers. And 1 thing we do is a value stream assessment where we go into the customer, map all their existing tools and kind of how we can gradually replace that, so that it’s not a big bank, but they get it as renewals come up as they — as we solve their biggest problems. And their biggest problems can be like my Jenkins installation can be upgraded, and it’s a problem or I’m behind on security, so I need to integrate a set of security tools. Where I have the security tools, the compliance is it there? I can prove that. I’ve doing. So depending on what their needs are, we make a plan with them, and that frequently goes up to the highest level in the organization.
Typically, middle management is engaged with kind of keeping their DIY solution up in the kind of up and running. So it’s important for us to talk to those decision makers in the top.
Derrick Wood: Perfect. Thank you.
Sharlene Seemungal: Next, we’ll move on to Karl at UBS.
Karl Keirstead: Okay. Great. Maybe I’ll ask one for Brian and one for Sid. So Brian, on the 3Q revenue guide of $141 million at the high end, that’s only up the smidge from your actual in 2Q. It’s typically up double-digit on a percentage basis. So I wanted to ask — was there anything that felt a little one-time-ish in 2Q or that’s on your mind in 3Q that you’d like to call out? And then I’ll — maybe I’ll follow up with Sid.
Brian Robins: Yeah. Thanks for that Karl. There was nothing there was, if you look at 2Q revenue and go through, there was nothing that was anomalous sick in the revenue. I would just say 2Q is an actual and 3Q’s guidance.
Karl Keirstead: Yeah. Okay. Makes sense. Hey, Sid, you called out a Jira displacement in a large multinational bank. You don’t often hear that and I think you and Brian have often said over the last couple of years that it’s very early stage for GitLab to be displacing Jira software. Is there a change in that cadence.
Sid Sijbrandij: We’re getting closer now. This was a proof point for us. The customer, as far as I know is very happy with the change. So we’ve gone from this just being something we hoped for to something that’s happening. And what’s happening is that people are moving from point solutions to a platform because you can get the cycle time up. And our enterprise portfolio management is good enough to replace Jira any instances, companies are also going from having like very complex work streams in Jira that needs lots of human sign-offs to automating more. For example, all those security scans or compliance management that, for example, you’re going to force that every piece of code is reviewed by 2 people. Instead of signing off and check boxing in Jira with people you can all automate that, and that’s what also enabling us to do that.
