Here is why Microsoft's $7.5 billion acquisition of Github makes sense

By Anuj Sharma - June 8, 2018
Expect creation of many new use cases by developers, on Microsoft platforms, which will potentially take the tech giant to the position it enjoyed in Offline OS Space, especially in Personal Computing....

On June 4 Microsoft announced its acquisition of software development platform GitHub, in a deal worth $7.5 billion. This acquisition is one of the largest ever done by Microsoft, behind its LinkedIn acquisition for $28.1 billion and Skype acquisition for $8.5 billion. But why Microsoft acquired this platform is the question that still remains in minds of many angry developers and users.

Here is how Microsoft will benefit from it.

Github is currently used by over 28 million developers, who in turn represent over 1.5 million organisations across an array of industries. GitHub, being the go-to open source code management repository, has gained popularity among developers and companies who host entire projects, documentation and code on it. The GitHub acquisition takes Microsoft back to the early 1990s when it relied on a community of developers to build applications based on its windows operating system.

According to Cybermedia Research, the GitHub acquisition will enable Microsoft to benefit in a Smart and Connected World from the marriage of new battery of developers with its platforms and solutions.

With this acquisition, expect creation of many new use cases by developers, on Microsoft platforms, which will potentially take the tech giant to the position it enjoyed in Offline OS Space, especially in Personal Computing.

The GitHub acquisition further signals a departure for Microsoft towards a more open work culture – a departure from the windows-only ecosystem. Under the guidance of CEO Satya Nadella, the new Microsoft is building on its sustainable competitive advantage, by embracing outside talents, platforms and businesses into its network of business.

Earlier, Microsoft has also released open-source tools and languages and started supporting and even using Linux on Azure. All these moves, coupled with the GitHub deal, portend to a future where GitHub and Azure are more closely knit together.

And since the cloud business has been at the core of Microsoft’s growth in recent years, GitHub acquisition potentially enables Microsoft to play a more significant role within the open source developer community that builds software on cloud platforms. Through this acquisition, Microsoft would aim to get these developers on board its Azure platform, taking the fight to Amazon AWS.

The GitHub acquisition will also have a clear impact on enterprise business, owing to the growing importance of the developer community in the enterprise segment. GitHub has witnessed strong growth in its enterprise business, generating $100 million in sales in 2017 with its enterprise offering, which installs the git code-management platform behind the user’s firewall.

Microsoft has been known for its solid products catering both to consumer as well as enterprise segments. However, Microsoft has never been acknowledged with technological disruptions. However, if one checks the last few acquisitions of Microsoft, there is a clear focus on what they are betting on – AI, IoT, Cloud, Social Media, Gaming and VR.

The GitHub acquisition would add to the continuum. GitHub coupled with LinkedIn would provide Microsoft with an unenviable access to rich data. For instance, Microsoft could use LinkedIn to leverage GitHub data on programmers with specific skill-sets.

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