Microsoft ‘All In’ For Open Source with GitHub Deal
GitHub, the well-heeled and vibrant project collaboration platform for programmers, is being acquired by Microsoft as the software giant seeks to push deeper into enterprise software development.
Microsoft said Monday (June 4) the all-stock deal for GitHub, which is currently used by more than 1.5 million companies, is valued at $7.5 billion. The acquisition is expected to close by the end of 2018.
Microsoft said Nat Friedman, former CEO of Microsoft’s Xamarin unit, would serve as chief executive of GitHub. Chris Wanstrath, co-founder of GitHub, will become a Microsoft technology fellow.
Microsoft (NASDAQ: MSFT) pledged to retain GitHub’s “developer-first ethos,” adding that the new unit would operate independently to “provide an open platform for all developers in all industries.” The company estimates more than 28 million developers use GitHub’s collaboration platform, that includes more than 85 million code repositories.
In announcing the GitHub acquisition, Microsoft CEO Satya Nadella stressed the transaction would help accelerate enterprise developers’ use of GitHub. Nadella also noted in a blog post that Microsoft hopes to create a balance between maintaining an open development platform where developers could tap into programming languages and tools while “we bring Microsoft’s developer tools and services to new audiences.”
The role of developers is expected to explode as more industry sectors move to digital platforms. “Developers will be at the center of solving the world’s most pressing challenges,” Nadella said during a conference call. “We love open-source developers.”
Microsoft has released as open source several tools such as its .NET software development platform and its Visual Studio Code, Wanstrath added.VS Code is a source code editor for Windows, Linux and Mac OS.
“We want to bring more developers and more capabilities to GitHub” as more programmers move to the cloud, Friedman said. “Every workflow that a developer wants to pursue, we will support.”
Microsoft claims to be the most active company on GitHub. The growing number of large companies using the site include developers from Facebook (NASDAQ: FB), Microsoft-owned LinkedIn and Twitter (NYSE: TWTR). According to the web site Crunchbase.com, GitHub had raised an estimated $350 million in venture capital, including a $100 million investment by Andreessen Horowitz.
Microsoft said it would report the financial results of it GitHub unit as part of its “Intelligent Cloud” operations that is attempting to expand to “intelligent edge” applications such as the Internet of Things. The software giant said the GitHub deal would help it bridge the gap “from code to cloud and code to edge.”
Cloud industry analysts praised the deal, saying Microsoft’s “all-in” approach to open-source development gives it a leg up over Amazon Web Services (NASDAQ: AMZN) and Google Cloud (NASDAQ: GOOGL) in the competition to attract developers of applications—especially enterprise applications—to Microsoft Azure.