It is now confirmed, Microsoft say is buying code-repository platform, GitHub for $7.5b (about the same amount it paid for Nokia’s mobile business four years ago. GitHub was valued at $2b three years ago). Well this is not by any way the biggest Microsoft acquisition so far, you’ll recall that Microsoft had to fork out $26.2b to buy social professional networking site LinkedIn two years ago.
Like I said in my last article, it makes sense for Microsoft to be buying GitHub at the this time from business to technology reasons but for starters, GitHub is probably the largest code repository and has big companies including Google and Microsoft hosting some projects on it including documentation. The platform reportedly has 85 million repositories with 28 million developers contributing hence the tag; the nerdy Facebook or Facebook for developers.
Under the new arrangement, GitHub gets a new CEO in the person of Nat Friedman, the founder of Xamarin who will in turn report to Microsoft’s Cloud and AI chief Scott Guthrie. The outgoing CEO and co-founder Chris Wanstrath will now be working at Microsoft as a technical fellow also reporting to Guthrie.
Besides the reasons I gave the last time, it makes more sense for Microsoft to buy GitHub with more than 1,000 of its employees contributing to the platform after it killed Codeplex, its own GitHub competition back in December. By having that number of employees on the platform, they could influence other developers to come to terms to using more Microsoft tools for development and this is not even including the public cloud benefits Microsoft stands to gain. On that Satya Nadella said “we will bring Microsoft’s developer tools and services to new audiences.”
On the enterprise side, Microsoft CEO Satya Nadella said “we will accelerate enterprise developers’ use of GitHub, with our direct sales and partner channels and access to Microsoft’s global cloud infrastructure and services.”
Developers are however worried about what Microsoft did in the past with acquisitions like Nokia’s smartphone business unit. Microsoft bought and killed that unit and even made it worse by making sure as part of the contract that Nokia could not produce its iconic phones for some years. Nokia has since tried to come back to the smartphone business with its new found love for Android and is still struggling to breakeven in all major markets.
GitHub competitor, GitLab services now says it has seen a 10 times increase in the number of developers moving their repositories over to its platform.
It is yet to be seen if this will be sustained once GitHub settles into its new family. But developers should rather welcome this on two fronts and one being that GitHub chose the acquisition road over an IPO which could even mean less administrative control by its original founders with a bigger focus on business and revenue instead. Wall Street would be more concerned about revenues and profits at the expense development.
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The other is that Microsoft has really made efforts in the open source space from joining the Linux Foundation at the highest levels to open sourcing PowerShell and Visual Studio Code, Microsoft brought Ubuntu to its Store and much more.