Technology 4 min read

Code-Hosting Service GitHub Acquired by Microsoft for $7.5 Billion

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Ahead of Apple WWDC 2018, Microsoft purchased code-hosting service company GitHub.

According to reports, tech giant Microsoft has agreed to acquire the code-hosting service company GitHub. The company is expected to announce the purchase today, June 4th. The deal is reportedly worth $7.5 billion.

To date, GitHub is considered one of the most significant tools used by developers and programmers. The cloud-based repository service has played a vital role in enabling small startups to the most prominent tech names like Microsoft to work on old and new code collaboratively.

Microsoft is one of the top contributors to GitHub, together with other Silicon Valley tech giants like Apple, Amazon, and Google. Microsoft alone has over a thousand employees actively pushing codes to repositories on the site. In fact, Microsoft reportedly has its original Windows File Manager source code stored on GitHub.

Read More: Microsoft Just Acquired an AI Startup to Make its Bots Sound Like Humans

Back in 2015, GitHub was valued at $2 billion USD though it remains a mystery just how much money Microsoft paid to acquire the service company. Reports said that GitHub preferred to sell the company instead of going public, choosing Microsoft because they are impressed by its CEO, Satya Nadella.

Despite GitHub’s significant role in the world of programming and software development, the company has been facing several challenges. In fact, the company reportedly lost around $66 million USD over three quarters back in 2016, and for the past nine months, has continuously been searching for a new CEO.

Before the deal, it had been rumored that Microsoft was in talks with GitHub these past months. The code-sharing service company is currently hosting around 27 million software developers working on 80 million repositories of code. Recent negotiations between the two company allegedly included a supposed partnership which eventually led to an acquisition.

Former GitHub CEO Chris Wanstrath will take a different role as Microsoft appoints a new CEO. They did something similar with LinkedIn when they acquired that company in 2016.

GitHub has previously been a haven for opensource projects, but it never turned a profit.

What will change about GitHub now that it has a corporate parent company?

Details of the Deal

Despite a history of curbing open source projects like Linux, Microsoft CEO Satya Nadella spoke positively about the GitHub acquisition.

“Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation…

We recognize 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 challenges.”

Given Nadella’s encouraging viewpoint on AI, Microsoft seems to telegraph an innovation-focused trajectory. With the GitHub acquisition, Microsoft occupies the same space as the software development program.

Small startups and enterprise companies alike made use of the platform for its collaborative, cloud-based workflow.

One might feel positive about this “return to form” for Microsoft. But developers on the Twitterverse aren’t so easily convinced.

Developers Unhappy With GitHub’s Decision

André Staltz recounted his experience of when Microsoft acquired Nokia.

After moving in, Microsoft quickly shut down the former Nokia headquarters. This process also stalled innovation on former Nokia projects, ultimately ending them, says Staltz.

But Microsoft stated in their acquisition announcement that their GitHub purchase will “empower developers”. Much like the blockchain-based social platform Minds, Microsoft claimed it is “all-in on open source”.

Unlike Minds, the truthfulness of Microsoft’s statement remains to be seen amid revelations that Microsoft also received “deep access” to data Facebook obtained.

But in the meantime, developers chose to move to GitHub’s competitors like Atlassian’s BitBucket. You can also try SourceForge or gitbucket, as well.

Do you believe that the code-hosting service company GitHub made the right decision to be acquired instead of going public?

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Chelle Fuertes

Chelle is the Product Management Lead at INK. She's an experienced SEO professional as well as UX researcher and designer. She enjoys traveling and spending time anywhere near the sea with her family and friends.

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