PlanetScale ends free tier bid, sheds staff in profitability bid

CEO defends decision in difficult tech market

Distributed database vender PlanetScale has made work-force lay-offs and ended its free-tier services in an effort to achieve sustainable profitability.

The company launched its database as a service in 2021, based on a distributed version of MySQL called Vitess, which is used by Slack, Airbnb and GitHub for its horizontal, globally scalable OLTP architecture.

To date, the distributed DB vendor has raised $105 million in VC and seed funding, most recently with a $50 million Series C round led by private equity investor Kleiner Perkins in 2021.

In a statement sent to The Register, PlanetScale said it was laying off jobs, primarily in sales and marketing, and sunsetting the Hobby plan, its free-tier database service which is set to end on April 8.

“I would like to express my extreme gratitude for the people we are parting ways with today,” CEO Sam Lambert said.

He added that retiring the free tier might inconvenience some our users and asked those affected to email the support desk if they need help.

“PlanetScale is the main database for companies totaling more than $50 billion in market cap… The database space is full of unnecessary hype. Our technology is proven among some of the world’s largest tech companies. We do not need to give away endless amounts of free resources in order to keep growing,” he said.

However, critics where quick to decry PlanetScale’s move on social media platform X, formerly known as Twitter.

One user asked if it was the most callous layoff notices ever. “I understand the pricing change but the layoff messaging is tone deaf,” said another.

Another said: "I remember when @Railway had to wind down their freebies and did it with such tremendous care, understanding and thoughtfulness. And prices that still made sense for that group. I guess that's why they're posting job openings and you're slipping in one line about layoffs."

Speaking to The Register, Labert told us: “I don't think there is any good way of managing [layoffs]. We've seen many attempts, some make it very much into the media. We obviously thank and wish well every member of PlanetScale. The most important thing is what you actually do, not what you say.”

He said he’d help affected staff find roles, meeting with CEOs to make personal recommendations. He said some of those departing had already found new roles and customers had also asked if they could help find places for staff laid off.

“Twitter's not a real place: playing up to the mob and what they want to see versus what we're actually doing,” he said.

Lambert told us the company’s audited financial results were recognised by Deloitte and the leadership made the decision to become profitable by making some cuts.

The decision to end the free tier was based on the company's decision to focus on attracting and retaining larger customers, he said.

“We are the main database for incredibly serious companies such as financial institutions and three of the top hundred websites on the internet,” he said.

“It's really important that we focus on our core audience, which have large scale database needs or critical availability needs. We're still a startup, we should focus hard in the places that we're best at. Running a free tier is very, very expensive, to the order of millions of dollars. It doesn't bring us the type of customers that we are perfect for. So we decided that to make this difficult decision,” he said.

Lambert warned there were a number of unsustainable companies among the tech start-up glitterati and “a very dark time [is] coming in tech”. He said it was best to be profitable in that environment.

Over the last year a number of public database companies have disappointed the market with their growth. Last week, Snowflake saw its shares slide after reducing revenue guidance. MariaDB went through a troubled IPO and has since announced the end of its DBaaS, which is being spun of as a separate company.

MongoDB reported last week recorded a net loss of $55.5 million for the fourth quarter, down from $64.4 million a year earlier. Revenue reached $458 million in Q4, an increase of 27 percent year-over-year, but shares fell after its revenue forecasts fell below expectations.

Lambert at PlanetScale argued the trouble hitting the market was less well-known among privately held companies. ®

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