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Microsoft to take on Amazon with $7.5 billion GitHub deal

04 Juin 2018

After a week of rumors, Microsoft today confirmed that it has acquired GitHub, the popular Git-based code sharing and collaboration service.

The all-stock deal is expected to close by the end of 2018.

The open-source model was once anathema to Microsoft, the leading commercial software company.

The current CEO of Microsoft, Satya Nadella, has been actively involved in courting coders and initiating coding initiatives since taking the helm at the company in 2014. Microsoft didn't mention plans to integrate GitHub with LinkedIn, but the "learning" angle here makes me think that could figure in longer term plans.

Profits from GitHub will be reported under Microsoft's Intelligent Cloud division in financial reports.

However, Microsoft said on Monday GitHub will operate independently and developers will be able to deploy their code to any operating system, cloud and device.

However, there is hidden value in this deal that is critical to Microsoft's future: Visibility.

The story initially broke last week when discussions between the two parties reportedly became serious after years of on-and-off conversations.

The acquisition reflects Microsoft's "ongoing pivot to open-source software, seeking to further broaden its large and growing development community", said Richard Lane, an analyst at Moody's Investors Service. Open source stands for making software code available to everyone.

Throughout the late 90s and 2000s, the company waged a number of campaigns against Linux, the open-source operating system that former CEO Steve Ballmer famously called "a cancer".

Microsoft also is looking at the GitHub Markeplace as a way to get its own tools and services in front of developers. Primary among them is the likelihood that competitors to Microsoft would move their code repositories off GitHub, diminishing its value as a community. While some are happy to see GitHub getting the backing of Microsoft, others are rather concerned, and there have been reports of a sudden shift of projects to GitHub alternative GitLab.

GitHub now has over 27 million software developers contributing to over 80 million repositories of code.

And many in the company were defending Microsoft's commitment to GitHub and its principles, even before the deal was announced.

Microsoft to take on Amazon with $7.5 billion GitHub deal