Today (June 4) Microsoft announced that it will acquire GitHub, the popular code repository that’s like Google Docs for developers, for $7.5 billion.
The acquisition comes as Microsoft continues to court the open-source community under CEO Satya Nadella—but it’s still making GitHub users anxious.
Microsoft has long had a complicated relationship with open-source software—which is typically free to use and open for all developers to tweak and commercialize.
Throughout the late 90s and 2000s, the company waged a number of campaigns against Linux, the open-source operating system that former CEO Steve Ballmer famously called “a cancer.” In 2007, Microsoft alleged that Linux violated 235 of its patents, and it went on to press charges against mapping company TomTom for IP infringement via its use of Linux (the two companies eventually settled).
But lately, Microsoft’s stance has changed. Under Nadella, who replaced Ballmer in 2014, the company has formed partnerships with Linux, and launched a number of open-sourced products and services with other companies. It even has hinted that Windows, its core operating system, might itself become open source.
Changes to Microsoft’s business model are behind the shift. The company once made money primarily by selling its closed, proprietary Windows OS and accompanying software for a fee. Linux and other software built on the open-source model, however, tend to be free. Their spread threatened Microsoft’s control over what software got installed on the world’s PCs.
But now, much of Microsoft’s revenue growth comes not from Windows but from selling cloud services to developers. That means the company can embrace open-source tools it once shunned. Microsoft’s own developers are regular GitHub users—in 2016, it ranked as the organization with the most contributors to the site.
Despite Microsoft’s embrace of open-source, GitHub users are split on an acquisition.
For one thing, Microsoft has a track record of purchasing companies and letting them atrophy. Skype, Nokia, and Wunderlist (which makes a to-do app) have all lost much of their popularity after falling under Microsoft’s umbrella.
Larry Salibra, a Hong Kong-based engineer at Blockstack, which posts its open-source software on GitHub, says that GitHub’s trove of data makes it a valuable target for Microsoft, possibly at the expense of developers. Some of the projects on GitHub are private, some public. The site stores valuable code for thousands of developers and companies, and also can track major trends in the software industry. Many fear that Microsoft will use its ownership of GitHub to see what projects are popular, and then launch rivals of its own.
“GitHub doesn’t compete with most companies, but Microsoft is a potential competitor or acquirer for a huge percentage of smaller companies in the tech industry,” says Salibra. “Giving your competitor access to your company’s most valuable secrets understandably makes people uneasy.”
Users on Twitter had mixed feelings about how Microsoft may or may not influence GitHub.
I got an email from one my client who is @Github private repo business customer. They want to move out of Github to a personal GIT server hosted either in AWS or Google Cloud. They fear that Microsoft might get insight into their codebase. Small startups/business do not trust MS.
— nixCraft (@nixcraft) June 3, 2018
Microsoft to aquire GitHub pic.twitter.com/IjEIB1Ljhq
— polar ᵗʰᶦᶰᵏˢ ᵖᵉᵒᵖᶫᵉ ˢʰᵒᵘᶫᵈᶰ'ᵗ ˢᵗᵃʳᵛᵉ (@p01arst0rm) June 4, 2018
Sad to see all these cheap negative quips about Github & Microsoft. MS has been doing some awesome work in Open Source recently (just look at VS Code), and hired some excellent people. I see no reason to be worried.
— Filippo Valsorda (@FiloSottile) June 4, 2018
While some developers seem unhappy about an acquisition, it’s possible that Microsoft’s interest is GitHub’s saving grace. Bloomberg reported that despite growing revenue, the company posted a loss of $66 million (paywall) over the first nine months of 2016. In August 2017, CEO Chris Wanstrath announced he would step down.
Many firms depend on GitHub to collaborate and build their products. If it’s not making money, some bigger company will have to buy it to keep it afloat. Microsoft’s deep pockets can, at least, ensure that GitHub stays active for a long time.
This post has been updated with confirmation of Microsoft’s acquisition.