Microsoft takes on Amazon with $7.5bn GitHub deal
NEW YORK: Microsoft Corp, fully embracing a model it once saw as a threat, said on Monday that it was buying GitHub, an open software platform used by 28 million programmers, for $7.5 billion.
The deal is a bid by Microsoft to gain ground in the internet era of software development, where applications increasingly run on remote data centres — on so-called cloud computing.
Amazon.com Inc is the leader in the cloud market so far, but Microsoft has transformed itself in recent years to become a strong No. 2 as a supplier of cloud computing services. Its vital Office productivity applications and database software are available in cloud versions.
Microsoft also competes with Google, IBM, Salesforce and others in the cloud marketplace. All of them are trying to lure software engineers to use their cloud tools and services. The more programmers on a company’s platform, the more software applications are created, attracting customers and still more developers — a flywheel of growth and profit.
“The strategic battle in the tech world is for developers,” said Frank Gens, chief analyst for International Data Corp, a research firm. “For Microsoft, the GitHub deal is about strengthening and widening its relationships with developers.”
Satya Nadella, Microsoft’s chief executive, said the deal would advance the company’s ambitions in cloud computing and bring smarter software to every industry, on any digital device.
“Developers are the builders of this new era, writing the world’s code,” he wrote in a blog post. “And GitHub is their home.”
GitHub, founded in 2008 and based in San Francisco, was created largely as a community for software developers to share programming tools and code. It has been a champion of the open-source software movement, with its ethos of freely sharing code in public.
Today, GitHub is used by a wide range in the tech community, from lone programmers to the nation’s largest companies. Developers can share code, make comments and buy software tools. They work in digital storage spaces, called repositories. Some are open to all users; others are closed to members of a team.
GitHub now has more than 85 million code repositories.
Individuals can use GitHub for free. But there are monthly subscription charges for extra storage, development tools and private repositories.
The company does not disclose its revenue, but analysts estimate it is running at $200 million a year.
Executives from both companies insisted that GitHub would remain technologically neutral, welcoming developers using any code or any cloud service, rather than a Microsoft walled garden.
The proof, analysts say, will be in how GitHub operates under Microsoft ownership. “Developers by their nature are often suspicious of corporate ambitions,” said Ed Anderson, an analyst at Gartner Inc. “Microsoft will have to demonstrate its willingness to put the interests of developers ahead of any Microsoft-specific agenda.”
The $7.5 billion purchase, an allstock deal, is the second-largest acquisition Microsoft has made since Nadella became chief executive in early 2014.
The bigger deal came in 2016, when Microsoft bought LinkedIn, the social network for professional workers, for $26.2 billion. (GitHub ranks third in Microsoft’s history, also behind the $8.5 billion purchase of Skype in 2011.) smartphone “addiction.”
Features being added to “limit distraction” from iPhones included being able to turn-off lock screen notifications at bedtimes to avoid “getting spun up” by prompts when perhaps one just wants to check the time.
“I think we are all going to be using Do-Not-Disturb a whole lot more,”