GitHub for $7.5bn

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Powered by Guardian.co.ukThis article titled “Microsoft is buying code-sharing site GitHub for $7.5bn” was written by Alex Hern, for The Guardian on Monday 4th June 2018 11.56 UTC

Microsoft is buying the code-sharing site GitHub, a developer-focused startup that has become a crucial part of the programming industry, for $7.5bn

The acquisition shows Microsoft further cementing its role as a company built around tools for developers, part of a pivot away from its flagship Windows operating system started by its chief executive, Satya Nadella, four years ago.

“That is why we are so excited about today’s announcement,” Nadella wrote in a blogpost announcing the acquisition. “More than 28 million developers already collaborate on GitHub, and it is home to more than 85 million code repositories used by people in nearly every country. From the largest corporations to the smallest startups, GitHub is the destination for developers to learn, share and work together to create software. It’s a destination for Microsoft too. We are the most active organisation on GitHub, with more than 2 million ‘commits,’ or updates, made to projects.”

The vast majority of GitHub’s users access the site for free, with the trade-off being that the code they share must remain public. Users can pay for private accounts, while larger companies can pay more for the ability to host GitHub’s platform on their own private servers. The paid-for features reportedly bring in around $200m in annual revenue.

Following the acquisition, GitHub will continue to operate independently and will remain an open platform, Microsoft said. The company committed to continuing to allow to use the programming languages, tools and operating systems of their choice for their projects, and to be able to deploy their code to any operating system, any cloud and any device.

“The enterprise offering will fold nicely into Microsoft’s other businesses,” the analyst Ben Thompson of Stratechery wrote “but … the real win for Microsoft is not incremental peanuts in enterprise revenue but winning hearts and minds with developers broadly.

“In other words, not only should sceptics not be worried about Microsoft unduly favouring their own platforms, they should also be excited that, more than any other potential acquirer, Microsoft is likely to push the individual and community aspects that make GitHub so unique.”

GitHub’s ubiquity has led to some unconventional uses. GreatFire, the activist campaign that works to disseminate information blocked by Chinese web censors, uses GitHub as a distribution platform, ensuring that China cannot block the material without also severely harming its domestic technology industry. The government tried, in 2013, but lifted the ban five days later after an outcry from Chinese coders.

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In recent years, GitHub’s popularity as a platform has disguised problems within the business. It has been without a chief executive for almost a year and its revenues have been outpaced by its expenditure, with net losses in the tens of millions. As part of the deal, Nat Friedman, former chief executive of Xamarin, a software firm acquired by Microsoft in 2016, will take over as chief executive.

Microsoft, for its part, has slowly been repositioning itself from being focused on the Windows operating system to a broader suite of developer-focused services, including its Azure cloud platform – the largest competitor to Amazon Web Services – and the Cortana AI suite.

In March, the chief executive, Nadella, finished the reorganisation, axing the Windows division entirely and splitting its responsibilities between a consumer-focused group, led by a former Microsoft Office head, and a developer-focused one, led by the company’s cloud and enterprise chief.

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