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Microsoft Getting GitHub for $7.5 Billion

By George Khoury, Esq. on June 04, 2018 | Last updated on March 21, 2019

Microsoft recently announced that it will seek to purchase GitHub, the open source code repository, a popular tool that developers use. The move has caused a bit of a stir as many of Microsoft's own competitors use the code repository, including Google, Apple, Facebook, and more, not to mention millions of developers do too.

Reportedly, the deal will cost Microsoft $7.5 billion. For its investment, Microsoft doesn't plan on changing GitHub's philosophy, but does seem poised to promote their cloud product Azure to the massive GitHub community of 26 million developers.

Is This The Next Big Deal?

This deal is pretty big. In 2015, GitHub was valued at $2 billion. To jump, $5.5 billion in a few years is significant. As Bloomberg reported, the company had put up consistent losses recently, and was still searching for a new CEO.

For Microsoft, the acquisition came after prior talks of a partnership with GitHub. GitHub was allegedly impressed by Microsoft's CEO Satya Nadella, and likely sees the acquisition as a simpler path to a similar end compared to going public. GitHub's legal team likely agreed with that sentiment.

Goodwill or Change?

While many people might be scratching their head about why Microsoft would spend $7.5 billion to purchase a free, open-source code repository, others see it simply: Microsoft is trying to get on the good side of developers. While companies like Apple, Google and Microsoft run operating systems, independent software developers often make the software that drives sales of the operating systems and even devices.

Alternatively, some are reporting that the purchase would harken back to an earlier time in the company's history, to when it focused more on developing software. Acquiring GitHub would put the software giant back in the center of where most of the software development is happening.

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