Microsoft acquires GitHub, major developer community, for $7.5 billion

Last Updated Jun 4, 2018 2:11 PM EDT

Microsoft is acquiring GitHub, a website developers use to store and share code, for $7.5 billion in stock.

For the software giant, the deal is all about cementing relationships and influence with developers, Larry Dignan wrote for ZDNet. The 10-year-old GitHub, which is based in San Fransisco, is a platform for 27 million developers and hosts 80 million repositories of code. 

GitHub has been a cornerstone of the open-source movement, in which software companies make their code public, encouraging others to find bugs and build other software on top of the code. GitHub makes it easy for users to share, copy and tweak code—handy when several remote people collaborate on a project, for example. Under CEO Satya Nadella, GitHub has become a key way that Microsoft writes code—so much so that it's now the top contributor to the platform.

But the deal carries risks. Primary among them is the likelihood that competitors to Microsoft would move their code repositories off GitHub, diminishing its value as a community. 

Still, Microsoft promised in a blog post to keep GitHub an independent platform.

"We recognize the responsibility we take on with this agreement," Nadella wrote. "We are committed to being stewards of the GitHub community, which will retain its developer-first ethos, operate independently and remain an open platform. We will always listen to developer feedback and invest in both fundamentals and new capabilities."

Moody's analyst Richard Lane said the deal reflects Microsoft's "ongoing pivot to open source software, seeking to further broaden its large and growing development community." It also reflects the increasing importance of cloud computing software and the development of internet-connected devices, Lane said.

It's a change in direction for GitHub, which appeared to be exploring an IPO just two years ago, when it was valued at about $2 billion.

Under the deal, GitHub will become part of Microsoft's cloud computing unit, and its founder and CEO, Chris Wanstrath, will be a technical fellow at Microsoft.  

The Associated Press contributed to this report.