Microsoft have announced an agreement to acquire GitHub, the software development platform and web-based hosting service for version control using Git. Microsoft should instead focus on making all other developer tools they offer (Visual Studio, Visual Studio Code, etc.) work better with GitHub.
After some backlash from developers, Microsoft is now assuring investors that GitHub will remain the same open source platform and will operate "independently to provide an open platform for all developers in all industries". More than 28 million developers already collaborate on GitHub, and it is home to more than 85 million code repositories used by people across the globe. GitHub is the code-repository company popular with many software developers. Despite the company's money woes and lack of CEO, Github holds a privileged position in the development world.
Microsoft has flirted with buying GitHub in the past, including in 2016, although GitHub denied it then too. However, one person close to the deal said that GitHub wanted to be bought by Microsoft instead of going public, partly because it was impressed by its CEO, Satya Nadella.
GitHub will still operate independently from Microsoft, with Nat Friedman, now Microsoft Corporate's vice president, assuming the role of GitHub CEO.
According to a blog post by Microsoft, the transaction will be completed by the end of this year.
The deal reflects the company's ongoing pivot to open source software and seeks to further broaden its large and growing development community, Moody's analyst Richard Lane said. Potential synergies also exist between GitHub and Microsoft's hybrid cloud platform Azure, as well as LinkedIn. But Julie Lerman, a GitHub user who works as a Microsoft liaison with freelance developers, cautiously welcomed the partnership. An incremental share buyback, beyond Microsoft's recent historical quarterly pace, is expected to offset stock consideration paid within six months after closing.