The acquisition of GitHub will likely strengthen Microsoft’s cloud services offerings.
Microsoft will purchase GitHub, an online code repository used by developers around the world, for $7.5 billion worth of company stock, it announced June 4. Github co-founder Chris Wanstrath will join Microsoft as a technical fellow, and the company will operate as an independent unit within Microsoft. Nat Friedman, former CEO of software company Xamarin (which Microsoft acquired in 2016), will serve as CEO. GitHub had been without a leader since Wanstrath stood down from the role a year ago.
The acquisition of GitHub will likely strengthen Microsoft’s cloud services offerings, with the company now able to provide developers with one place to work on their code and host their programs. It’s also a stark transition for Microsoft, which actively fought against open-source platforms in the 1990s and 2000s. Former CEO Steve Ballmer once referred to open-source operating system Linux as “a cancer.”
The modern Microsoft, led by CEO Satya Nadella, strikes a markedly different tone. “Microsoft is all-in on open source,” Nadella said in a blog post about today’s acquisition. Still, the company’s history has made some developers fearful for its takeover of GitHub, as Quartz’s Josh Horwitz reported.
Microsoft has been on a buying spree for big-ticket items in recent years, with varying degrees of success. It acquired Skype in 2011 for $8.5 billion; Nokia’s mobile business for $7.6 billion in 2013 (that it sold for scrap in 2016); Mojang, the company behind the game Minecraft, for $2.5 billion in 2014; and LinkedIn for $26 billion in 2016.
And for as much criticism as Microsoft has endured over missing computing’s shift to mobile, the company is thriving. Last week, it surpassed Alphabet to become the world’s third most valuable company by market capitalization, and subscription services like Office 365 and its cloud offerings have been strong areas of growth. Microsoft’s stock price was up about $1, or 1%, from its $100 close on Friday, at the the time of publishing.