Microsoft Buys Code-Sharing Site GitHub For $7.5bn

Microsoft is to acquire the code-sharing site GitHub, in its latest shift toward developer services – and away from the company’s historic reliance on Windows.

The $7.5bn (£5.6bn) stock purchase is controversial in some ways, given the site’s emphasis on open source development. Microsoft has, in the past, taken an adversarial stance against open source, something that still rankles with some developers.

The move may also pose questions for some major Microsoft competitors that use the site to share their code, including Google, Facebook and Amazon.

Those most directly affected are the site’s more than 28 developers, some of whom said they were concerned Microsoft could alter GitHub for the worse, as some would say it has done with past acquisitions such as Skype.

‘Responsibility’

“Many of Microsoft’s takeovers are driven by user numbers, and Github has a lot of users,” UK app developer Malcolm Barclay told the BBC. “Presumably it wants something from them, but we don’t know what that is.”

Microsoft chief executive Satya Nadella acknowledged the ‘responsibility’ he said came with the acquisition.

“We recognise 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 challenge,” Nadella said in a statement.

He said that following the deal’s completion, expected by the end of this year, GitHub would continue to operate independently.

The San Francisco-based firm is to be run by Nat Friedman, the founder of developer tools firm Xamarin, which Microsoft bought in 2016. Friedman is an open source veteran respected by the developer community, Microsoft said.

GitHub co-founder Chris Wanstrath, who is currently executive chairman, is to move elsewhere within Microsoft to work on strategic technology projects. GitHub doesn’t currently have a chief executive.

Developer win

Most of GitHub’s developers use it for free, but the company makes an estimated $200m a year from paid services, which allow accounts to be made non-public or for companies to run the software on their own servers.

Microsoft said GitHub would remain an open platform with access to programming languages, tools and operating systems of the user’s choice, and allowing deployment to any operating system, cloud or device.

Analyst Ben Thompson of Stratechery said the move could help Microsoft win developers’  “hearts and minds” at a time when the company is making developer tools one of its core areas.

“More than any other potential acquirer, Microsoft is likely to push the individual and community aspects that make GitHub so unique,” he wrote.

In March Nadella completed a reorganisation that eliminated the Windows division, splitting its responsibilities between the company’s consumer and developer units.

Microsoft formerly operated a code-sharing site of its own called Codeplex, but shut it down last year, saying GitHub had become the “de facto place for open source sharing”.

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