Monday, June 4th 2018

Microsoft to Acquire GitHub for $7.5 Billion

Microsoft Corp. on Monday announced it has reached an agreement to acquire GitHub, the world's leading software development platform where more than 28 million developers learn, share and collaborate to create the future. Together, the two companies will empower developers to achieve more at every stage of the development lifecycle, accelerate enterprise use of GitHub, and bring Microsoft's developer tools and services to new audiences.

"Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation," said Satya Nadella, CEO, Microsoft. "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."
Under the terms of the agreement, Microsoft will acquire GitHub for $7.5 billion in Microsoft stock. Subject to customary closing conditions and completion of regulatory review, the acquisition is expected to close by the end of the calendar year.

GitHub will retain its developer-first ethos and will operate independently to provide an open platform for all developers in all industries. Developers will continue to be able to use the programming languages, tools and operating systems of their choice for their projects - and will still be able to deploy their code to any operating system, any cloud and any device.

Microsoft Corporate Vice President Nat Friedman, founder of Xamarin and an open source veteran, will assume the role of GitHub CEO. GitHub's current CEO, Chris Wanstrath, will become a Microsoft technical fellow, reporting to Executive Vice President Scott Guthrie, to work on strategic software initiatives.

"I'm extremely proud of what GitHub and our community have accomplished over the past decade, and I can't wait to see what lies ahead. The future of software development is bright, and I'm thrilled to be joining forces with Microsoft to help make it a reality," Wanstrath said. "Their focus on developers lines up perfectly with our own, and their scale, tools and global cloud will play a huge role in making GitHub even more valuable for developers everywhere."

Today, every company is becoming a software company and developers are at the center of digital transformation; they drive business processes and functions across organizations from customer service and HR to marketing and IT. And the choices these developers make will increasingly determine value creation and growth across every industry. GitHub is home for modern developers and the world's most popular destination for open source projects and software innovation. The platform hosts a growing network of developers in nearly every country representing more than 1.5 million companies across healthcare, manufacturing, technology, financial services, retail and more.

Upon closing, Microsoft expects GitHub's financials to be reported as part of the Intelligent Cloud segment. Microsoft expects the acquisition will be accretive to operating income in fiscal year 2020 on a non-GAAP basis, and to have minimal dilution of less than 1 percent to earnings per share in fiscal years 2019 and 2020 on a non-GAAP basis, based on the expected close time frame. Non-GAAP excludes expected impact of purchase accounting adjustments, as well as integration and transaction-related expenses. An incremental share buyback, beyond Microsoft's recent historical quarterly pace, is expected to offset stock consideration paid within six months after closing. Microsoft will use a portion of the remaining ~$30 billion of its current share repurchase authorization for the purchase.

Simpson Thacher & Bartlett LLP is acting as legal advisor to Microsoft. Morgan Stanley is acting as exclusive financial advisor to GitHub, while Fenwick & West LLP is acting as its legal advisor.
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29 Comments on Microsoft to Acquire GitHub for $7.5 Billion

#26
lexluthermiester
btarunrIt's both a bargain and a waste of $7.5 billion.
It's a bargain because Microsoft can now see the source code of every commit ever made to GitHub since its inception, open-source or closed-source, public or non-public, free software or proprietary software.
It's a waste of $7.5 billion because no software developer outside Microsoft with more than one neuron between their ears will ever touch GitHub again.
That about sums it up! Well said.
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#27
LemmingOverlord
bugIf you didn't have a problem with others seeing your code when you initially sent it to remote computers, why would you have a problem now?
And for those that did have a problem, there's on-premises GitHub Enterprise.


I will. Why wouldn't I?


Between integrated wiki, issue tracker and code reviews and analytics, I'd say there's a lot of exclusive stuff GitHub has to offer. Not in the sense nobody has done it before, but in the sense GitHub is probably the most convenient one-stop shop solution for all the above.
Those features you just mentioned are definitely not exclusive to GitHub. Apart from existing alternatives, what's to stop someone from creating a new one..? Amazon could easily put up a similar service...
R0H1TYou're making it sound as if it's a bad thing, unfairly hurting others (competitors?) is but not the first part.
Monetization is not inherently a bad thing. In fact GitHub has a revenue model, but it's just not working well enough. I think he's talking about Microsoft monetizing it further, putting up a different revenue model, charging more and segmenting things even further.
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#28
FordGT90Concept
"I go fast!1!11!1!"
Microsoft will use Visual Studio to monetize GitHub. A lot of developers work remote anymore and to get that support in Visual Studio, you got to pay thousands of dollars for the Team version of Visual Studio. Acquiring GitHub will lead to better implementation in Visual Studio and the Community edition/GitHub combo will be popular with the open source community. That the same time, Microsoft can monetize the private side of GitHub for businesses that don't need full blown Team support.


Yeah, a lot of projects are going to fork to GitLab and other competitors and I'm sure Microsoft knew that. That isn't the core of their business though (which are businesses using Visual Studio). They'll surely expand on that.
Posted on Reply
#29
trparky
TheGuruStudAnd how many hate it every day of it for decades? They've been liars, cheats, incompetent, and criminal from day 1. I hope Gates gets disemboweled....slowly.

Remember when games had a Linux ver on disc? Pepperidge Farm remembers. Then these dickless, mouth breathers bribed all the devs to use the garbage known as DX. You think it's fun being shackled to this crap?

Pirating the junk doesn't absolve them of their sins.

I've been around since 3.1 days and I don't have a short memory.
*speaks like Yoda*
The hate is strong with this one. Hm.

What you may not know is that without Windows the PC industry as we know it would not be what it is today, Windows made computers easy to use for the masses; they brought industry standardization and ease of use to the table. People love to say "This year will be the year of the Linux Desktop". :rolleyes: We've been saying that for over a decade and where is the Linux community on that goal? Nowhere close. Everyone has different ideas on everything. There's a reason why there's industry standards, to get things done. And in the end a computer is a tool; nothing more, nothing less.
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