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June 4, 2018updated 05 Jun 2018 8:50am

GitHub Sold for $7.5 Billion in Microsoft Stock

Git going, going, gone to Microsoft

By Umar Hassan

Microsoft has confirmed it is buying leading code repository GitHub for $7.5 billion in Microsoft stock – using part of its $30 billion share repurchase programme to fund the acquisition.

Nat Friedman, former CEO of Xamarin (acquired by Microsoft in 2016), will take over as CEO. Chris Wanstrath, co-founder of GitHub, will join Microsoft as a technical fellow.

Microsoft is one of the biggest contributors to the popular code repository and as CEO Satya Nadella increases the company’s focus on in-house development on Linux, extended reach with the developer community will be strategically useful.

Satya Nadella: “Three Clear Opportunities”

The Microsoft CEO said he saw “three clear opportunities ahead” in a blog post on the acquisition.

“GitHub will remain an open platform, which any developer can plug into and extend. Developers will continue to be able to use the programming languages, tools and operating systems of their choice for their projects – and will still be able to deploy their code on any cloud and any device.”

“Second, we will accelerate enterprise developers’ use of GitHub, with our direct sales and partner channels and access to Microsoft’s global cloud infrastructure and services. Finally, we will bring Microsoft’s developer tools and services to new audiences.”

He added: “Most importantly, we recognize the responsibility we take on with this agreement. 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.

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Microsoft reportedly acquires GitHubGitLab: Congratulations (and Thanks!)

The rumoured acquisition sent a flurry of developers to rival site GitLab, which announced that it was seeing 10 times the normal daily amount of repositories moving to the site: “We’re scaling our fleet to try to stay up” it added.

In a letter of “congratulations” to GitHub, the repository (which has users including NASA, IBM and SpaceX) described developers as the “new kingmakers” but warned of the consequences of a takeover, saying: “GitHub has earned mindshare within the developer community, and Microsoft’s acquisition is certainly an attempt to garner and cultivate that mindshare. However, the long term strategic implication seems to be that Microsoft wants to use GitHub as a means to drive Azure adoption.”

The company added: “Developer tools have a high capacity for driving cloud usage. Once you have your application code hosted, the natural next step is to need a place to deploy it. Today, Microsoft fosters cloud adoption by tightly coupling Azure, it’s cloud service, together with Microsoft Visual Studio Team Services, it’s set of development tools. Microsoft will likely integrate GitHub into VSTS in order to take advantage of the strong tie with Azure.”

VC Praise

Peter Levine, General Partner at VC outfit Andreessen Horowitz said in an emailed statement: “When we first invested in GitHub in 2012, we knew that if software was to eat the world, then GitHub was the catalyst to make that happen. Today GitHub is trusted by over 28 million developers and has become the platform for all developers around the world…Hats off to Chris and the whole team and Satya and the Microsoft team for recognizing this amazing opportunity.”

Reddit Ranting

The response to Microsoft’s acquisition of GitHub has divided opinion between coders and software developers on Reddit, where a thread about the rumoured acquisition rapidly drew thousands of comments.

One user, filleduchaos, wrote: “Personally it’s not about Microsoft, it’s about any non-independent party having de facto control over source control. GitHub and Gitlab and others are good in large part because version control repo hosting is their only business. There’s no other corporate interest or goal (no matter how well-intentioned) to shape the platform.”

They added: “Now Github is saddled with the ponderous weight of a mega-corporation’s bottom line. Changes will happen because Microsoft wants them. And while they may all be changes the community likes, there’s still something off about a giant tech company being the one to make those decisions. Not to mention that MS will inevitably want to somehow integrate it with the rest of its offerings, which…no.”

Other code repository alternatives available to software developers include Bitbucket, SourceForge, GitLab, Kiln, and Codeplane.

Upon closing, Microsoft expects GitHub’s financials to be reported as part of the Intelligent Cloud segment.  Microsoft will use a portion of its remaining ~$30 billion in current share repurchase authorisation for the purchase.

The CEO of CloudBees, Sacha Labourey, told Computer Business Review: “There may be a knee-jerk reaction from some to this, but I think it’s great news. Few can doubt Microsoft’s commitment to open source.”

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