Post updated on Monday morning, after Microsoft announced its agreement to acquire GitHub.
Microsoft has long understood the power that comes from having a massive amount of developers on your side. In GitHub, the company is adding a community of 27 million developers who use the repository as a critical part of their software factories ― the same developers who represent the key target market for Microsoft’s cloud technologies.
The San Francisco-based company behind the popular coding platform and developer community has agreed to be acquired by Microsoft for $7.5 billion in stock, a significant premium over Github’s valuation of $2 billion as of its most recent financing round. News of the deal surfaced in a report Sunday by Bloomberg News, after Business Insider reported Friday that the two companies have been in negotiations
Why did Microsoft make this deal? In short, GitHub is a big part of modern software development. Individual developers can use Github as a public-facing resume of code they’ve written, and 1.8 million companies and organizations use it to share code among their developers, track the progress of ongoing projects, and facilitate maintenance on completed ones.
Founded in 2008, GitHub is a commercial service based on the Git open-source project, and it gives people and companies a web-based way to collaborate on software development. The ten-year-old company is practically a tracking stock for the number of software developers currently plying their trade around the world, a number that has been pegged around 20 million but that estimate probably undercounts hobbyist developers.
The company has been looking for a CEO since last year, when co-founder Chris Wanstrath announced plans to step down from the role. Wanstrath will become a technical fellow at Microsoft, reporting to cloud and AI leader Scott Guthrie.
Git, and Github, played a huge role in the modernization of software development as web and mobile applications exploded during the last decade. Sharing and reusing code, rather than rewriting code for the most basic tasks for each new project, has improved developer productivity in countless ways. Github gave smaller, growing companies a way to implement some of the best practices in place at tech conglomerates while finding and contributing to the open-source projects that changed the way software was developed.
Now even the big companies of our day, including Microsoft, use Github as an important tool in their software development processes. Microsoft became the biggest contributor to open-source projects hosted on Github in 2016, and it actually uses a modified version of Git to develop Windows. One closely watched aspect of this deal will be whether fierce competitors like Amazon Web Services and Google continue to store code on a Microsoft-owned property.
Despite all those users, Github was not making money, and it probably wasn’t long for the world as a independent company. Microsoft intends to operate the company as a standalone entity, it said Monday morning, as it has done following the LinkedIn acquisition. But Github users will be watching closely to see if it becomes a new Azure-based code repository service over time.
In the short term, nothing is likely to change very much given the central role Github plays in the software development process. If Microsoft has shown anything over the last few years since CEO Satya Nadella took control, it’s shown a commitment to meeting developers where they are, rather than forcing them onto Microsoft owned-and-controlled technologies.
So by that measure, this deal will be the real test of Microsoft’s newfound love for open-source software and multiplatform development. As news of the pending deal broke on Sunday, developer Twitter was full of worries about one of the biggest companies on the planet — a software giant that was once prosecuted by the government for abusing its power — controlling the biggest repository of software on the planet.
Those fears might be overstated. It’s been said so much over the last few years as to verge on cliche, but this really is a different Microsoft. Eyeing big tech companies with skepticism is definitely prudent, but millions of companies already trust Microsoft with their email, financial spreadsheets, and proprietary code running on Azure servers.
Developers have a few options if they want to use a different service to host their code. Assuming they have the in-house expertise, software teams could simply use the Git project on hosted or cloud services to manage the version control process themselves, although that would involve sacrificing some of the flexibility provided by the Github user interface.
They can also use Gitlab, which quickly capitalized on developer angst Sunday with a live YouTube video explaining how to get up and running with its similar service, although less than 200 people were watching it when I joined about ten minutes after it got started.
When a sweaty Steve Ballmer made that classic speech to software developers at Microsoft’s 25th anniversary celebration in 2000, that was probably the last time Microsoft commanded the full attention of the developer community, which was also much smaller at the time. In the years following that performance, Apple stole the mobile computing show with iOS, and AWS won the hearts and minds of enterprise developers with its cloud services.
Under Nadella, Microsoft seems determined to recapture the attention and respect of the software development community. If it can be a responsible steward of one of the most important tools in modern software — and find a way to convince some of its users that Azure is the right cloud service for their needs — its purchase of Github will be another step along that path.