Microsoft will acquire GitHub for $7.5 billion
Microsoft is acquiring GitHub. After reports surfaced that the software giant was in negotiations to acquire GitHub. This is Microsoft CEO Satya Nadella's second big acquisition, following the $26.2 billion acquisition of LinkedIn two years ago. GitHub was last valued at $2 billion back in 2015, and Microsoft is paying $7.5 billion in stock for the company in a deal that should close later this year.
GitHub is a large code repository that has become very popular with developers and companies hosting entire projects, documentation, and code. Apple, Amazon, Google, and many other big tech companies use GitHub. There are 85 million repositories hosted on GitHub, and 28 million developers contribute to them. GitHub will now be headed by CEO Nat Friedman, the founder of Xamarin, who will report to Microsoft's Cloud and AI chief Scott Guthrie. GitHub CEO and co-founder Chris Wanstrath will now become a technical fellow at Microsoft, also reporting into Guthrie.
Microsoft killed its own code repository, Codeplex, in December and is currently the top contributor to GitHub. Microsoft now has more than 1,000 employees actively pushing code to GitHub repositories. Its popularity among developers could see Microsoft earn some trust and respect from developers. In bigger enterprises and slower moving businesses, the fact Microsoft has acquired GitHub will make it more trusted to use for projects and source control, simply because Microsoft is already trusted across many software and services by these companies. Microsoft will accelerate enterprise developers' use of GitHub, with direct sales and partner channels and access to Microsoft's global cloud infrastructure and services.
Trust and respect won't be easy for Microsoft to win though. Developers are already voicing their concerns about Microsoft's past abuses, and the company's failed acquisition of Skype and Nokia's phone business. GitHub itself hasn't scaled well and has faced its own issues over the years, and there are reaL concerns that Microsoft will need to address. GitLab, a GitHub competitor, claims it has seen a 10x increase in the amount of developers moving their repositories over to its service, an early sign that there's developer mistrust. Microsoft won't be able to address the general concern that important tools and internet services are being consolidated into the hands of a few big tech companies.
Even with all the concerns, there are plenty of reasons that this is a positive move for Microsoft and GitHub users. Microsoft has been actively pushing open source technology, and the company has open sourced PowerShell, Visual Studio Code, and the Microsoft Edge JavaScript engine. Microsoft also partnered with Canonical to bring Ubuntu to Windows 10, and acquired Xamarin to assist with mobile app development. These moves were met with surprise by developers initially, but that have earned Microsoft some respect. It's essential that Microsoft stewards the GitHub community forward to earn even more trust and developer love. The GitHub acquisition is a chance for Microsoft to prove that even further.
Microsoft has struggled with developer trust for years, it's a reason why Windows Phone failed and that its Universal Windows Apps platform hasn't taken off. Microsoft has spent recent years improving Windows 10 so it's a respectable development box. Tools like Visual Studio Code, which lets developers build and debug web and cloud applications, have gained popularity with developers. The question around the acquisition will be what Microsoft does with GitHub in the future. LinkedIn has remained separate, with some integration into Microsoft's Office software. Microsoft's Minecraft acquisition has been managed well, and it's likely that GitHub will need to stay as separate to maintain developer trust. However, we may see even closer integration between Microsoft's developer tools and the service. At Build last month, Microsoft continued its close work with GitHub by integrating the service into the company's App Center for developers. Microsoft knows it needs to tread carefully.