Kite, whose product was an AI coding assistant that was launched long before GitHub Copilot, has officially closed down. Founder Adam Smith posted last week to say officially that “we have stopped working on Kite and are no longer supporting the Kite software.”

This will not be a surprise to users for whom Kite has been “temporarily unavailable” for some time, at least since June last year, though determined developers were still able to install it. Unlike GitHub’s Copilot, Kite performed all its processing on the local machine, citing (in 2019) the benefits of low latency, security and privacy.

Smith’s own take is that Kite failed for several reasons. First, he said that “the tech is not ready yet,” and that even Copilot, built on Open AI, “shows a lot of promise but still has a long way to go.” Today’s models do not understand the structure of code, he said.

Second, and perhaps more to the point, Smith said that the company failed to monetize its product. It took five years, from 2014 to 2019, to make a product fit for market; but even then “our product failed to generate revenue,” despite building a user base of 500,000 active developers. “Our diagnosis is that individual developers do not pay for tools,” said Smith.

The Kite code is now mostly open source on GitHub under the BSD-3-Clause license, which allows commercial use and modification but prohibits using the name of the software or its contributors in derived products.

Smith is an entrepreneur who previous founded Xobni, a search add-on for Microsoft Outlook. Xobni was acquired by Yahoo in 2013 but shut down a year later. San Francisco-based Kite was founded in 2014 and grew to have around 15 employees. It took a long time to deliver a product, as Smith noted, but In May 2020 the company launched Kite Pro, which Smith described as “our first paid product for professional developers,” along with JavaScript code completions and an “all-new engine for Python completions.”

Smith claimed that Kite made developers “on average, 18 percent more productive,” which is more than enough to justify paying – but most of the functionality was also available in Kite Free.

In October 2020 Kite expanded its support from 2 to 13 programming languages. Then Kite launched Team Server, an enterprise version of Kite, in February 2021. Smith promised that its “self-hosted 25x larger ML models” would “help [users] code faster.”

The claim that individual developers will not pay for tools has attracted debate on Hacker News “I’m a web developer. My company pays for JetBrains IntelliJ for me. And I love it. But, if I had to pay for it out of my own pocket, I’d use VS Code instead,” said one comment.

The remark illustrates the problem nicely. Developer tools are expensive to build, but many are made available free by platform companies such as Microsoft because they promote the platform. This in turn makes it hard for commercial tools vendors to succeed, with JetBrains being a notable exception. Open source is another factor.

Despite the above, it may also be true that Kite gave too much away for free for too long. The same may be true of Docker, which achieved massive take-up for its container tools and repository, but suffered commercially because most of its users paid nothing for them. Three years ago, Docker sold its enterprise business to Mirantis. Docker now claims to have doubled its revenue into the last 9 months, but at the price of unpopular price rises and restrictions on free usage. Without a viable business model though, no business can fly indefinitely.