Microsoft Bought Github for $7.5 Billion, Embracing Open Source

Microsoft EVP Scott Guthrie and Jason Warner senior vice president of technology at GitHub at Microsoft Build 2018

Microsoft has reached an agreement to buy GitHub, the source repository and collaboration platform, in a deal worth $7.5 billion. GitHub began by focusing on open-source software but has since branched into services that let large companies like Facebook use it for more sensitive, proprietary projects.

Microsoft is paying $7.5 billion for the popular coder hangout GitHub. The acquisition is said to have started as a co-marketing initiative, which grew into a discussion of an investment from Microsoft, before ultimately transforming into an outright purchase.

Of course, being so essential to many developers' workflows means that any slight change to GitHub (let alone drastic ones) could alienate much of the platform's user base. GitHub's current CEO Chris Wanstrath will become a Microsoft technical fellow, reporting to executive vice president Scott Guthrie. Firstly, the company assures that GitHub will remain an open platform and will operate independently.

Controlling an app store that already has access to 29 million developers will not only help Microsoft sell its own developer tools, but could let Microsoft profit on other people's tools, too. Users took their opinions to Twitter, many praising the buyout given Microsoft's position in the software space, while critics of the firm rejected the purchase and urged others to find a new home for their code.

Moody's analyst Richard Lane said the deal reflects Microsoft's "ongoing pivot to open source software, seeking to further broaden its large and growing development community".

Microsoft doesn't expect to make money off the deal until 2020, but said it will have minimal negative impact on earnings.

The open-source model was once anathema to Microsoft, the leading commercial software company.

Satya Nadella, Microsoft CEO, said that the acquisition is in line with the tech giant's ethos of being a developer-first company and that it signifies Microsoft's "commitment" to strengthening this ethos.

Friedman said in a conference call with Wanstrath, Nadella, and CFO Amy Hood, that GitHub will have "new and compelling" capabilities with Microsoft's help.

Bloomberg, which had earlier reported a deal would be announced, had noted that Github was last valued in 2015 at $2bn.

The obvious and jaded answer is that Microsoft wants to push all of those developers to run their software on Microsoft's cloud, Azure. The Verge notes that Microsoft even hosts its own original Windows File Manager source code on GitHub.

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