Microsoft buys code-sharing site Github for $7.5bn

Leigh Mccormick
June 5, 2018

GitHub will still operate independently from Microsoft, with Nat Friedman, now Microsoft Corporate's vice president, assuming the role of GitHub CEO.

However, Microsoft said on Monday GitHub will operate independently and developers will be able to deploy their code to any operating system, cloud and device. That will propbably spook big software companies like Google and Facebook, which won't like the idea of developing their code on a platform controlled by a rival. Finally, he mentioned bringing Microsoft's dev tools to new audiences and retaining GitHubs's "developer-first ethos". The company is based on the principle of open-source licensing, where developers are allowed to access, use, and tweak code written by others with the goal of improving it.

Microsoft's somewhat recent open source strategy - of getting all buddy-buddy with open source developers and adding support for Linux - runs counter to the Microsoft of the early 2000s, when then-CEO Steve Ballmer said, "Linux is a cancer that attaches itself in an intellectual property sense to everything it touches". This deal will mark another dramatic step in that direction.

"Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation", said Microsoft Chief Executive Officer Satya Nadella said in a statement. And late previous year, GitHub revealed that it would be adopting Microsoft's GVFS tool for managing large-scale source code repositories. (AMZN) and Alphabet Inc. It's also a social network of sorts for developers. Within three quarters of 2016, GitHub lost over $66 million.

GitHub CEO and Co-Founder Chris Wanstrath has also published "A bright future for GitHub" on the GitHub Blog, and also states that Microsoft and GitHub share a common vision.

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Microsoft is now the most active corporation on GitHub, with more than two million contributions of code to GitHub projects. In total, some 28 million developers use GitHub, with 85 million code repositories. David Heinemeier Hansson, creator of the Ruby on Rails framework, joined people that were forlorn about the deal, and tweeted that this would be a "sad end to the independence of GitHub". "In all walks of life, we see the power of communities, and this is true for software development and developers". "Each acquisition has been defined by an asset that was unique in its own way and could be leveraged in multiple parts of Microsoft". Only time will tell how Microsoft will fully leverage GitHub's development community - will it strongarm GitHub users onto Microsoft's cloud and other software services, or perhaps sideline GitHub's Atom editor in favor of Visual Studio's code editor?

GitHub, last valued at $2 billion in 2015, preferred a sale to an initial public offering (IPO), and was particularly impressed by Nadella, according to Bloomberg.

Morgan Stanley acted as GitHub's banker, while Fenwick & West LLP served as legal adviser.

Simpson Thacher & Bartlett LLP is acting as legal advisor to Microsoft.

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