The Goldilocks CDE: Gitpod Fits Between SaaS and Self-Hosted

CDE, which stands for “Cloud Development Environment”, is a hot product category for developers currently. Up till now, the consensus was there were two main types of CDEs: the SaaS model (software as a service) and the so-called “self-hosted” model, where the CDE is hosted inside a customer’s cloud environment.

Well, according to the company Gitpod, there is a third way: “dedicated,” which it defines as self-hosted but not self-managed. I talked with Mike Brevoort, Chief Product Officer at Gitpod, and Talia Moyal, Head of Marketing, to find out how Gitpod is different from GitHub Codespaces (SaaS) and Coder.com (self-hosted).

To set the scene, Brevoort quickly explained the origin story of Gitpod. The original product was an IDE (Integrated Development Environment) named Theia, which had been inspired by Jupyter Labs. Theia was later handed over to the Eclipse Foundation and Gitpod then pivoted into a SaaS service based on VS Code.

“They [Gitpod] were the first team that forked VS Code and got it running on the server,” he said. “Pre-Codespaces, we worked really closely with the GitHub team early on, and the core team has been working on this for about five years in total, from inception to now.”

The Evolution of Gitpod’s Model

At first, Gitpod offered a SaaS model designed for individual developers, but eventually they introduced a self-hosted model due to demand from large companies. According to Brevoort, the self-hosted version was well-adopted, but they became concerned that it placed operational management burdens on customers. This prompted them to offer what he calls “a hybrid service,” called Gitpod Dedicated, that is hosted in customers’ cloud accounts but managed by Gitpod.

“So it’s the best of […] self hosted and the best of SaaS,” he said. “It runs in your Cloud account and meets security requirements that you have, meets the connectivity requirements that you have. It’s managed by us, not you. We maintain it, we keep it up to date, [and] it gets better every single day. And we manage that at scale, because that’s what our business is.”

Gitpod still offers its original SaaS version, called Gitpod Cloud, which Brevoort said is suitable for smaller companies and open source developers.

Talia Moyal added that its competitor Coder is really both self-hosted and self-managed, in that customers have to do both. Whereas with Gitpod, she said, their customers only have to do the hosting part — Gitpod takes care of the “management” of the CDE.

I noted that in my discussion with Coder, security was a primary reason why its enterprise customers want to self-manage their CDEs. I suggested that for some of those companies — for example, healthcare providers — self-managing the CDE would be imperative in order to fully be in control of security.

Brevoort countered that Gitpod, similar to Coder, also targets large enterprises with high concerns for security. He said that Gitpod always ensures that it meets the security, compliance and connectivity requirements of large enterprises. He added that Gitpod’s version of “self-hosted” (sans self-managed) helps with enhancing developer efficiency and productivity, because Gitpod takes care of all the operational aspects.

“Everybody’s talking to us about…how do we make our developers more efficient? How do we increase developer velocity? How do we get more out of our team? And that’s true […] when you look at, like, AI coding assistants and copilots — and CDEs play a really important part in that, because it’s, like, how can I just be ready to code as soon as possible and get rid of all of the time involved with setting up environments, [or] running back configuration drift, or how do I context-switch. Everybody is just so focused now on how do I make my developers more efficient.”

Brevoort went on to say that Gitpod is experiencing significant growth in its dedicated service, including catering to customers with stringent security and data management requirements. He says that Dedicated now accounts for over 90% of their revenue growth. Many of its customers would prefer the ease and convenience of SaaS solutions, he said, but they opt for dedicated services due to their specific operational and security needs — particularly around data classification and software supply chain security.

Regarding who in enterprises is making the decision to use Dedicated, Brevoort said that “it’s usually someone who’s really interested in improving developer productivity driving this, or it’s someone who’s security.” Whoever is choosing the CDE, often they need other departments in their company to approve it from a security or compliance perspective — and Dedicated checks those boxes, according to Brevoort.

CDEs Are Still an Early Adopter Market, but That’s Changing

Despite the intense competition between CDE products like Gitpod, Coder, GitHub Codespaces and others (including new entrants like Daytona), CDEs are still a relatively new phenomenon for developers — both inside and outside of enterprises. “There’s a very small minority of companies that have currently adopted CDEs,” Brevoort acknowledged.

“What we see is a lot of Silicon Valley [and] Bay Area startups have [got CDEs], in a variety of ways,” he said. “A lot of them have built their own versions of this. We work with some and they tend to be more forward-leaning, especially ones that have really big code bases. And I think this is an opportunity for the rest of the industry, the long tail of it, to adopt the same practices.”

I asked whether it’s likely that SaaS companies, like GitHub with its Codespaces product, will move more to the “self-hosted” option with CDEs? Brevoort replied that although he can’t speak for GitHub, he did note that Codespaces already has interconnectivity with Microsoft Azure’s cloud computing environment.

“I think that GitHub and Microsoft [are] highly incentivized to have you run those workloads on Azure,” he said, “and so I’m sure they’ll continue to make it easier to do that in private — but yeah, obviously can’t speak for them.”

In terms of CDEs as a market category, Brevoort thinks they will become more mainstream over the next several years.

“I think it will become very mainstream; and probably a lot simpler to adopt. Now, we’re still talking about, like, how do we even get this up and running? And do I have to self-host, and what can I connect to, and people understanding how it can really change how they develop software. [But] I think it’ll just become the normal way.”

LLMs Will Come to CDEs

He added that having a central cloud service in which a developer works — and that’s fundamentally what a CDE is — will also encourage other new tooling. “Because you have a more consistent centralized place to run those developer flows, you could do a lot of interesting integrations,” he said.

Many of those integrations will surely be with AI products. Brevoort suggested that CDEs will be the perfect place for developers to play with large language models (LLMs).

“When people talk about LLMs, they are likely going to bring the LLM to where the data is, versus [bring] the data to where the LLM is. And we think that if there are centralized development environments in the cloud, then you’re gonna bring LLMs to that environment.”