Microsoft spent a bushel of money this week to go out and buy GitHub. It cost them $7.5 billion in stock, quite a hefty price for the programming repository. In fact, it was 25 times revenue, according to a report on CNBC.
While on its face it was a play for developers, many in that very profession were miffed to hear about the new owner. The question on everyone’s mind was, would they leave it independent or commercialize it and tune it for Azure. The answer was probably somewhere in the middle.
TechCrunch reports that on a conference call on Tuesday, the company went out of the way to put developers at ease who might be concerned. “GitHub will remain an open platform that any developer can plug into and extend, Microsoft promises. It’ll support any cloud and any device,” Microsoft indicated on the call, according to TechCrunch.
That doesn’t mean, however, that Microsoft doesn’t have commercial plans for its new $7.5 billion trinket. It does. There will be an enterprise version coming that Microsoft will sell through its sales channel and the company will no doubt be making deep connections into the GitHub technology on the Azure cloud platform.
Although Microsoft is growing fast, the latest data from Synergy Research shows that it is still far behind Amazon in the cloud market. One way to differentiate itself from AWS is to make it more friendly to developers, especially those in enterprise settings, who are used to using GitHub to publish their software.
Jack Gold who, is president and principal analyst at Jack Gold Associates, says this is really about finding a way to attract developers to Azure, who might otherwise use AWS (or Google).
“Overall, this acquisition puts Microsoft ahead in the web hosting market against fierce competitors AWS and Google, and creates an incentive for many more app developers to host on Azure, especially in the commercial space where MSFT is currently less competitive than in the enterprise space. That is a win-win for Microsoft. And it doesn’t hurt the developer community either, as they will gain some additional incentives (albeit MSFT-centric),” Gold said.
Patrick Moorhead, who is president and principal analyst at Moor Insights & Strategy had a similar view. “This makes Microsoft more of a one-stop shop for developers. While developers can use any cloud, tools, or services, I’m sure we will see easy developer access to Azure services and Visual Studio integration in the future. This is a very good move for Microsoft as it has targeted more than any company, multi platform developers,” he said.
As with any purchase like this by a large corporation bringing its own self-interest to bear, it’s hard to know just how this will play out, but if Microsoft is smart, it will keep its word and keep the product mostly independent, while picking its spots for commercial opportunities.
Photo by Bhupinder Nayyar on Flickr. Used under CC by 2.0 license.