Microsoft has confirmed that it has purchased Github, an open source coding website, for $7.5 billion in Microsoft stock. The purchase is Microsoft's biggest acquisition since the acquisition of LinkedIn for $26 billion in 2016. Github is the largest host of source code in the world and its last valuation was at around $2 billion in 2015. Microsoft's purchase is a big bet on the company's cloud business Azure (which just posted a 93% increase in revenue last quarter), hoping to lure the code developers on Github towards Azure and away from Amazon and Google's own cloud offers. Github's community as of March of 2018 consisted of 28 million developers and 85 million code repositories.
Microsoft offers a robust group of services for developers including the Visual Studio Code and the open source .NET programming framework. The purchase of Github will complement the current strategy of providing tools that gently steer developers towards Microsoft Azure cloud. Github allows developer to share and work on software products by hosting them, however, developers still need to run the software - which is where complex open source tools built by developers usually turn to large public cloud services provided by Amazon, Google or Microsoft. The opportunity ahead for Microsoft lies in providing seamless integration between Github and Azure to give developers an easy way to get their open source projects up and running. Some Github users have already begun discussed doubts about whether the acquisition will lead to Github eventually favoring Microsoft products over others, leading to Microsoft CEO Satya Nadella responding to those concerns by saying that Github would continue to be an open platform that would work with all public clouds.
Microsoft Corporate Vice President Nat Friedman, previously CEO of Xamarin, will become the new CEO of Github following the purchase. Github's former CEO and Founder Chris Wanstrath will transition into a Microsoft technical fellow position and will begin working on strategic software initiatives.
The acquisition reflects the ongoing change in Microsoft's stance regarding open source under Microsoft CEO Satya Nadella. Nadella has explained that Microsoft sales team will look to increase the speed of adoption of Github from their current big business customers.
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