Microsoft To Acquire Github For $7.5 Billion

CEO Satya Nadella wants to empower developers while assuring GitHub will operate independently.

Ted S. WarrenAP Photo

Microsoft is growing its software development services even further with will acquisition of GitHub. The 10-year-old code-repository platform is being picked up for $7.5 billion in Microsoft stock, the company announced Monday.

GitHub was founded as a startup in 2008 to provide a platform where software developers can host and review each other’s code. Usage of the platform grew quickly to over 2,000 code repositories by 2011. Usage of the platform then exploded following a $100 million venture capital investment in 2012 and has approximately 27 million software developers today.

The service is free for open-source development projects. However, the company generates revenue through developers and businesses paying a monthly fee to host their code repositories and other services.

The deal to acquire GitHub should be completed by the end of the year, according to Microsoft. The software giant also states GitHub will continue to operate independently and will “provide an open platform for all developers in all industries.”

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Additionally, current GitHub CEO Chris Wanstrath will step down from the role and become a Microsoft technical fellow to work on strategic software initiatives. Microsoft Corporate Vice President Nat Friedman will replace Wanstrath in the role as GitHub CEO. He is an open source software development veteran. He previously founded Xamarin, which was also acquired by Microsoft in 2016.

“Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness, and innovation,” said Satya Nadella, CEO, Microsoft. “We recognize the community responsibility we take on with this agreement and will do our best work to empower every developer to build, innovate and solve the world’s most pressing challenges.”

“As we look to the next decade of software development and beyond, we know it’s all about the developer,” Wanstrath wrote in his announcement of the acquisition on the GitHub blog. “And as we’ve gotten to know the team at Microsoft over the past few years through collaborating on projects from Git LFS to Electron, we’ve learned that they agree. Their work on open source has inspired us, the success of the Minecraft and LinkedIn acquisitions has shown us they are serious about growing new businesses well, and the growth of Azure has proven they are an innovative development platform.”

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Microsoft stock (via Seeking Alpha) dropped briefly and lost gains from earlier in the morning following the GitHub acquisition. The stock recovered and is currently up slightly at 0.43 percent.

Meanwhile, the reaction from the GitHub community has been mixed largely due to Microsoft’s reputation of not being friendly to open-source prior to Satya Nadella becoming CEO in 2014. Nadella has changed the company’s approach since his ascent to the position, but old feelings die hard. Many are concerned Microsoft will try to integrate GitHub too tightly with its existing products and cause the service to lose what made it unique and user-friendly. Others are concerned the acquisition will potentially give Microsoft access to the code of competitors.