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When companies or organizations deploy version control, they have to make many choices. One of them is how many repositories to create. Your choices are essentially a) a single, monolithic repository that holds everything b) many separate, smaller repositories that hold all the individual parts c) something in between.
The prevailing convention today (especially in the open source realm) is to create many separate and loosely coupled repositories, each repository mapping to a specific product or service. That does seem reasonable: if you were organizing files on your filesystem, you would group them by functionality or role (photos, music, documents, etc). And, version control tools are functionally filesystems. So it makes sense to draw repository boundaries at directory/role levels.
Further reinforcing the separate repository convention is the scaling behavior of our version control tools. Git, the popular tool in open source these days, doesn't scale well to very large repositories due to - among other things - not having narrow clones (fetching a subset of files). It scales well enough to the overwhelming majority of projects. But if you are a large organization generating lots of data (read: gigabytes of data over hundreds of thousands of files and commits) for version control, Git is unsuitable in its current form. Other tools (like Mercurial) don't currently fare that much better (although Mercurial has plans to tackle these scaling vectors).
Despite popular convention and even limitations in tools, companies like Google and Facebook opt to run large, monolithic repositories. Google runs Perforce. Facebook is on Mercurial, or at least is in the process of migrating to Mercurial.
Why do these companies run monolithic repositories? In Google's words:
We have a single large depot with almost all of Google's projects on it. This aids agile development and is much loved by our users, since it allows almost anyone to easily view almost any code, allows projects to share code, and allows engineers to move freely from project to project. Documentation and data is stored on the server as well as code.
So, monolithic repositories are all about moving fast and getting things done more efficiently. In other words, monolithic repositories increase developer productivity.
Furthermore, monolithic repositories are also more compatible with the ebb and flow of large organizations and large software projects. Components, features, products, and teams come and go, merge and split. The only constant is change. And if you are maintaining separate repositories that attempt to map to this ever-changing organizational topology, you are going to have a bad time. Either you'll be constantly copying, moving, merging, splitting, etc data and repositories. Or your repositories will be organized in a very non-logical and non-intuitive manner. That translates to overhead and lost productivity. I think that monolithic repositories handle the realities of large organizations much better. Big change or reorganization you want to reflect? You can make a single, atomic, history-preserving commit to move things around. I think that's much more manageable, especially when you consider the difficulty and annoyance of history-preserving changes across repositories.
Naysayers will decry monolithic repositories on principled and practical grounds.
The principled camp will say that separate repositories constitute a loosely coupled (dare I say service oriented) architecture that maps better to how software is consumed, assembled, and deployed and that erecting barriers in the form of separate repositories deliberately enforces this architecture. I agree. However, you can still maintain a loosely coupled architecture with monolithic repositories. The Subversion model of checking out a single tree from a larger repository proves this. Furthermore, I would say architecture decisions should be enforced by people (via code review, etc), not via version control repository topology. I believe this principled argument against monolithic repositories to be rather weak.
The principled camp living in the open source realm may also decry monolithic repositories as an affront to the spirit of open source. They would say that a monolithic repository creates unfairly strong ties to the organization that operates it and creates barriers to forking, etc. This may be true. But monolithic repositories don't intrinsically infringe on the basic software freedoms, organizations do. Therefore, I find this principled argument rather weak.
The practical camp will say that monolithic repositories just don't scale or aren't suitable for general audiences. These concerns are real.
Fully distributed version control systems (every commit on every machine) definitely don't scale past certain limits. Depending on your repository and user base, your scaling limits include disk space (repository data terabytes in size), bandwidth (repository data terabytes in size), filesystem (repository hundreds of thousands or millions of files), CPU and memory (operations on large repositories take too many system resources), and many heads/branches (tools like Git and Mercurial don't scale well to tens of thousands of heads/branches). These limitations with fully distributed version control are why distributed version control tools like Git and Mercurial support a partially-distributed mode that behaves more like your classical server-client model, like those employed by Subversion, Perforce, etc. Git supports shallow clone and sparse checkout. Mercurial supports shallow clone (via remotefilelog) and has planned support for narrow clone and sparse checkout in the next release or two. Of course, you can avoid the scaling limitations of distributed version control by employing a non-distributed tool, such as Subversion. Many companies continue to reach this conclusion today. However, users adapted to the distributed workflow would likely be up in arms (they would probably use tools like hg-subversion or git-svn to maintain their workflows). So, while scaling of version control can be a real concern, there are solutions and workarounds. However, they do involve falling back to a partially-distributed model.
Another concern with monolithic repositories is user access control. You inevitably have code or data that is more sensitive and want to limit who can change or even access it. Separate repositories seem to facilitate a simpler model: per-repository access control. With monolithic repositories, you have to worry about per-directory/subtree permissions, an increased risk of data leaking, etc. This concern is more real with distributed version control, as distributed data and access control aren't naturally compatible. But these issues can be resolved. And if the tooling supports it, there is only a semantic difference between managing access control between repositories versus components of a single repository.
When it comes to repository hosting conversions, I agree with Google and Facebook: I prefer monolithic repositories. When I am interacting with version control, I just want to get stuff done. I don't want to waste time dealing with multiple commands to manage multiple repositories. I don't want to waste time or expend cognitive load dealing with submodule, subrepository, or big files management. I don't want to waste time trying to find and reuse code, data, or documentation. I want everything at my fingertips, where it can be easily discovered, inspected, and used. Monolithic repositories facilitate these workflows more than separate repositories and make me more productive as a result.
Now, if only all the tools and processes we use and love would work with monolithic repositories...