As previously reported, Microsoft was in acquisition talks to purchase GitHub. Recently, Microsoft confirmed that it just bought the code-sharing service.
The price tag? It’s a huge $7.5 billion, even though GitHub was only valued at $2 billion in 2015.
The New CEO
After acquiring the said service, Microsoft’s corporate vice president, Nat Friedman, will take the CEO role.
GitHub’s founder, Chris Wanstrath, will be Microsoft’s technical fellow. He will work on various strategic software initiatives.
In 2014, Chris became GitHub’s CEO again after Tom Preston-Werner, his co-founder, left following an investigation.
This approach is similar to what it did with LinkedIn. That is, GitHub will operate independently. In this way, it continues as an open platform for various developers in any industries.
No matter what business you are in, there’s no denying that every industry is affected by technology. In that case, the developer community is expected to grow.
Microsoft acknowledged the developers’ role in solving the many urgent challenges of the world. But their real power only comes when they create together and share code. The communities are vital, even in software development.
“That is why we are so excited about today’s announcement. More than 28 million developers already collaborate on GitHub, and it is home to more than 85 million code repositories used by people in nearly every country. From the largest corporations to the smallest startups, GitHub is the destination for developers to learn, share and work together to create software. It’s a destination for Microsoft too. We are the most active organization on GitHub, with more than 2 million “commits,” or updates, made to projects.”
GitHub was seeking an initial public offering. However, its employees stated that IPO will be pointless as Wanstrath was leaving.
The acquisition places the code-sharing service on a more sound foundation. The incoming head has a history in software development. Then, various teams at Microsoft are using software tools at GitHub.
The deal allows Microsoft to bolster its cloud computing initiatives. That is, it can encourage millions of engaged software developers to use its Azure cloud-computing service.
In 2018, GitHub’s community had 28 million developers. It also hosted 85 million codes.
Because of that, it is the largest host of codes in the world. However, the company failed to turn its popularity into a profit. It could be one of the reasons the company opted for an acquisition, instead of an IPO.
Its main revenue is from paid accounts. Even though large companies are using the service, it still faces stiff competition.
The deal makes a perfect fit for Microsoft’s goal of becoming the platform that every developer can go to. However, some are still wondering how Microsoft can take advantage of GitHub in its wide business strategy. Microsoft is known to invest in huge companies.
These days, Microsoft wants to be in a tight relationship with developers and encourage them to write more codes and host them in the Azure cloud. (To ensure people that they don’t need Microsoft to work with Azure, the company dropped its name from Azure.)