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Microsoft to acquire GitHub for $7.5 Billion

In a highly-discussed decision, Microsoft moves to purchase Open-Source Developer GitHub

In a highly-discussed decision, Microsoft moves to purchase Open-Source Developer GitHub

Why the purchase from Microsoft? Why now for GitHub?

The purchase announcement was made by Microsoft on June 4th. For Microsoft, this isn’t the average acquisition, as GitHub houses a vast and experienced global developer / open-source community. As the Microsoft team has already been working on and with the GitHub programming tool, it makes sense from a use standpoint, but developers are cautious. At the same time, these developers will gain access to the vast array of Microsoft services and its network. It also makes sense to bring in the roughly 28 million open-source developers to the Microsoft network. The deal looks to tie GitHub and Azure more closely together to encourage developers to create and design apps for Microsoft’s cloud services.

“Today, every company is becoming a software company and developers are at the center of digital transformation,” Microsoft announced.

The other aspect is GitHub’s position, prior to the acquisition. Many financial pundits have speculated that the GitHub team was on its last leg of individual support – meaning a takeover was imminent. Why? Because GitHub needed more enterprise-level customers, and they needed them ASAP. This type of customer requires private cloud environments hosted on the GitHub stack. Because GitHub employs a talented and well-taken care of team, the company wasn’t turning enough of a profit and was likely to run through the end of their Series-B funding this summer.

Combine GitHub’s need for liquid assets and Microsoft’s goal of expanding open-source concepts, and you have a financial match-made-in-heaven.

How does GitHub’s Community Feel?

Cautious. The developer community is wary to trust Microsoft completely during this transition, as “big brother” companies tend to experience. Rampant discussions from a variety of users have taken over platforms like Reddit and Hacker News, as everyone is scrambling to hypothesize on Microsoft’s motives. These conversations don’t appear to be pushing specific concerns, but it is clear there is a dearth of trust regarding Microsoft’s plans for this purchase. Are they planning on cutting major services, for example, the free hosting GitHub offers for open-source projects? These projects have been a staple of GitHub’s community.

Others argue that Microsoft is planning on leveraging GitHub’s knowledge to continue the development of their community. The idea of open-source being a fringe concept is fading. With this move, Microsoft is changing its stance. It’s declaring open-source a key component to their future plans, a far cry from the Steve Ballmer-led Microfot of the mid-2000s. This makes sense from a business perspective, as Microsoft looks to position itself as the leader in open-source developing.

“Microsoft’s focus on developers lines up perfectly with our own, and their scale, tools and global cloud will play a huge role in making GitHub even more valuable for developers everywhere,” said GitHub CEO Chris Wanstrath.

Microsoft also discussed the goal of retaining the developer-first ethos – one that encourages Microsoft use but doesn’t demand it. The platform will continue to function with multiple programming languages and operating systems, giving developers the freedom they desire.

TL;DR – A look ahead

Ultimately, Microsoft’s ability to give GitHub everything it needed, specifically access to more enterprise customers, allows the team to keep the gears rolling. Microsoft has the sheer size, the sales outlets, and a vested interest in appealing to the GitHub community. In the end, we think this was a great match for both sides. We’re curious to see what Microsoft has in store next.

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