UPDATE: Microsoft just acquired Github. Here’s our report.
The Business Insider reported that Microsoft held talks to purchase GitHub, a software developer platform. In 2015, GitHub was valued at $2 billion. However, if Microsoft would purchase it, the acquisition could cost more than $5 billion.
GitHub is like a cloud for codes. In here, the service hosts your source code projects in various programming languages. It allows easier collaboration with your teams. Your teammates can also review previous versions and integrate various tools.
The two companies were looking into a joint marketing partnership with an estimated cost of $35 million. But the talks progressed to a possible acquisition. Unfortunately, the report did not state whether the two companies are still discussing it or not.
The tools at GitHub are essential to various software developers. These developers use the site to store their codes while they discuss some issues with other developers. They also use it to monitor updates.
GitHub has over 23 million users. It could book over $200 million from subscription revenue and another $110 million from organizations that utilize enterprise product.
But why should Microsoft consider acquiring GitHub?
One of the reasons is that most opportunities are in the cloud. GitHub invested and spent its resources on the social network part of the site. It enables teams and communities to work together on a particular program.
Even though the program stored on GitHub is ready, developers will have to download and make it work smoothly. Although this method works if you have a simple tool that can run on a single computer, it is a different story if the program is complex that is designed to run on a public cloud.
Thus, if the Microsoft’s cloud would be integrated with GitHub, it would provide developers a better way to obtain a GitHub project running in the cloud. Developers will continue to use GitHub while it drives more users to Microsoft Azure.
Microsoft buying GitHub makes sense. The majority of developers want to use GitHub while Microsoft requires the attention of developers. Microsoft has a variety of tools for developers. These would include Visual Studio Code software. And as mentioned earlier, the popularity of these tools could be a funnel to the Microsoft Azure cloud and other products. If you like using one of its products, you are highly likely to opt for its other products. It is especially true if they are integrated well.
Microsoft had its GitHub competitor, which was known as Codeplex. However, the company killed it in 2017. If Microsoft acquired GitHub, the former would have a direct communication to millions of developers.
It is not the first time that Microsoft expressed interest in purchasing GitHub. In 2016, Microsoft also flirted with GitHub. However, the latter denied the report.
The discussion started amid the struggle of GitHub in replacing its CEO and founder Chris Wanstrath. If Microsoft would acquire GitHub, Nat Friedman, a Microsoft executive who used to run Xamarin, might take the CEO role of GitHub.
However, all of these are still speculations. Both companies did not comment on the matter.