Science & Technology

Microsoft Acquires GitHub for $7.5 Billion

Software lovers around the world were shocked when presented with the news of technology giant Microsoft acquiring GitHub for $7.5 billion in Microsoft stock. The deal closed on June 4, 2018, and shook the tech world to its very roots. Satya Nadella said in a statement on that, “Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation … We recognize the community responsibility we take on with this agreement and will do our best work to empower every developer to build, innovate and solve the world’s most pressing challenges.” So far, all the developers on the GitHub team will not see a change in terms of production, but Microsoft Vice President Nat Friedman will take over Chris Wanstrath’s role of GitHub CEO. Wanstrath will become a Microsoft technical fellow, working on strategic software initiatives.

The acquisition has left many software developers and GitHub users skeptical of the buy-out. Rivals of the version control hosting service such as GitLab, BitBucket, and SourceForge all saw a rise in the number of repositories on their respective sites. Fears emerged from Microsoft’s past purchases of Skype for $8.5 billion, Nokia’s handset business at €5.4 billion, and LinkedIn for $26 billion.

Skype was purchased in 2011 and was slowly integrated into Microsoft’s own services due to the transaction, which was a good move in hindsight, but Skype’s consistent problems as a web-based video chat service were irritating, especially since nowadays people can use Google Hangouts or even Discord, which is much more widely used in the gaming community now that it has video calling features.

In 2011, Steve Ballmer (CEO of Microsoft at the time) and Nokia CEO Stephen Elop announced a partnership to adopt the Windows Phone as the official phone for the company. Nokia was number one in phone sales that year, but fell to tenth after 2013. Sales fell quickly for Windows phones as Apple began to take off as well, and in 2012 the company announced 4000 layoffs to move assembly closer to Asia. By the end of 2013, 24,500 employees were laid off, and Microsoft took a lot of the blame. However, the purchase of Nokia by Microsoft still occurred in 2014, but left many consumers skeptical, and provides good precedent to what could potentially happen with this GitHub acquisition.

LinkedIn was purchased in 2016 to also integrate it better into Microsoft’s products. Although this site was not “messed up” by Microsoft, the fact that it is in the hands of the big company leaves many unsure of the future of the site. It still has some issues, but nothing has destroyed the brand or the company. However, it is also a site with no major US competitors, so that could be the reason it still stands today as the top business-related site for networking. Seeing the history of the acquisitions, it makes sense that people are uncertain about GitHub being under Microsoft’s umbrella.

A lesser known acquisition from Microsoft was of Spotify in 2018, valued at $41.8 billion. However, this was later revealed to be an April Fools as the article was posted at the beginning of the month by DigitalMusicNews, and even links to the Wikipedia page of April Fool’s day in the article.

GitHub began in 2008 in San Francisco, and quickly rose to hosting 1 million repositories by July of 2010. By 2015, they were already valued at around $2 billion. Some say Microsoft overvalued GitHub by a few billion dollars, but it might have been worth it in the long run.

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