Why is Microsoft acquiring GitHub?

New Delhi/Gurugram :  On June 4, 2018, Microsoft announced its acquisition of software development platform GitHub, in a deal worth US$ 7.5B. Github is currently used by >28M developers, who in turn represent >1.5M organizations across an array of industries.This acquisition is one of the largest ever done by Microsoft, on the back of its LinkedIn acquisition for US$28.1B, and the Skype acquisition at US$8.5B.

• What are the key takeaways from the Microsoft-GitHub deal? Read here Cyber Media Research (CMR) Viewpoint on Microsoft-GitHub deal.

1: Microsoft should keep GitHub independent.

There are many developers who have felt sour about the acquisition and have vowed to leave GitHub. Many of the GitHub’s peers and competitors have seen a significant spike in migrations of GitHub members to their platforms. Though these migrations are minimal, Microsoft should set things right by vowing to keep GitHub independent.

2: Going back to its roots

GitHub, being the go-to open source code management respository, has gained popularity amongst 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 on its windows operating system.

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. We will potentially see creation of many new use cases by developers, on Microsoft platforms. This will potentially take Microsoft to the position it enjoyed in Offline OS Space, especially in Personal Computing.

3: Focus on Azure; Clear Departure from ‘Windows Only’ Ecosystem

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

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

4: Right arsenal to have in a Cloud-first, and Cloud-led World

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.

5: Will positively impact the Microsoft enterprise business

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

6: Joining the dots: Astute acquisition strategy

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, i.e. 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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