Microsoft to acquire coding firm GitHub for $7.5 billion
Microsoft Corp. said it reached an agreement to buy GitHub Inc., the code repository company popular with many software developers, for $7.5 billion in stock.
The deal will add to Microsoft’s operating income in its fiscal year 2020, the company said in a statement Monday. Microsoft expects the deal to close by the end of 2018.
The acquisition provides a way forward for San Franciscobased GitHub, which has been trying for nine months to find a new chief executive officer and has yet to make a profit from its popular service that allows coders to share and collaborate on their work. It also helps Microsoft, which is increasingly relying on open-source software, to add programming tools and tie up with a company that has become a key part of the way Microsoft writes its own software.
The acquisition reflects Microsoft’s “ongoing pivot to opensource software, seeking to further broaden its large and growing development community,” said Richard Lane, an analyst at Moody’s Investors Service.
GitHub, which will operate independently, will be led by Nat Friedman, the former CEO of Xamarin and a current Microsoft developer tools executive. It will continue to support the programming languages, tools and operating systems of the user’s choice.
For Microsoft, acquiring GitHub is both a return to the company’s earliest roots and a sharp turnaround from where it was a decade ago.
Microsoft’s origin story lies in the market for software-development tools, with co-founders Bill Gates and Paul Allen focused on giving hobbyists a way to program a new micro-computer kit. But that vision of software tools was applied very differently under both Gates and former chief executive officer Steve Ballmer, who championed developers building proprietary software for Microsoft, not the kind of open-source projects found on GitHub.