Microsoft acquires GitHub for a whopping $7.5 billion in stock

Jun 5, 2018

Microsoft Corp. has confirmed that it has acquired GitHub, the popular Git-based code sharing service. The deal is expected to close later this year. GitHub was valued at about $2 billion in 2015, but Microsoft is now paying $7.5 billion in stock for the company. This is Microsoft's second big acquisition under CEO Satya Nadella, following the $26.2 billion acquisition of LinkedIn in 2016.

GitHub is the largest source code host globally, with over 28 million developers contributing to 85 million code repositories. Many popular companies like Apple, Amazon, and Google use GitHub to host entire projects, documentation, and code. But despite such a huge popularity, GitHub has never turned a profit and that's probably why the company looked for an acquisition.


Why Microsoft needs GitHub?

Microsoft is acquiring GitHub because it’s a perfect fit for its own ambitions to be the go-to platform for every developer, no matter the platform. Microsoft killed its own GitHub competitor, Codeplex, back in December, admitting that "GitHub is the de facto place for open source sharing." Microsoft now has more than 1,000 employees actively pushing code to GitHub repositories, and claims are that it is the biggest contributor to GitHub today.

Following the acquisition by Microsoft, GitHub will be led by CEO Nat Friedman, former Xamarin CEO and now Microsoft corporate vice president. Friedman will report to Microsoft’s Cloud and AI chief Scott Guthrie. GitHub founder and CEO Chris Wanstrath will now become a Microsoft technical fellow and work on strategic software initiatives, also reporting into Guthrie.


From left: Chris Wanstrath, Github CEO and co-founder; Satya Nadella, Microsoft CEO; and Nat Friedman, Microsoft corporate vice president


How developers responded to the acquisition

Microsoft has been actively pushing open source technology lately, with PowerShell, Visual Studio Code, and the Microsoft Edge JavaScript engine being pushed open-source. However, it's history of abusing its position vis-a-vis open source has left many developers furious about this acquisition. Microsoft's botched acquisition of Skype and Nokia’s phone business, as well as LinkedIn turning into a slow-loading junk after the Microsoft acquisition, has caused unrest among developers.

"They've shown time and time again that they can't be trusted. Aside from Microsoft not being trustworthy to the open source community, I'm sure they'll add tracking and possibly even ads to all the sites within GitHub. As well as possibly use it to push LinkedIn (which they own)," said software developer and student Sean, in a conversation with Slashdot. petition - “Microsoft: Stop Microsoft From Buying Github” - has also garnered support from more than 1,200 developers at the time of this writing.

GitLab, a GitHub competitor, meanwhile, claims to see a 10x increase in the normal daily amount of repositories moving to its service on the day Microsoft announced GitHub acquisition. This is certainly a sign of unrest among developers and Microsoft has a task cut-out to win their trust and respect.

Microsoft CEO Satya Nadella knows what the company needs to do, and it’s likely that GitHub will stay as separate as possible from the company. "Most importantly, we recognize the responsibility we take on with this agreement,” explains Nadella. “We are committed to being stewards of the GitHub community, which will retain its developer-first ethos, operate independently and remain an open platform. We will always listen to developer feedback and invest in both fundamentals and new capabilities.”

This Microsoft isn't the Microsoft it was before, and this GitHub acquisition is a chance for the company to prove that even further. It now remains to be seen how things shape-up.

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