Microsoft to take on Amazon with $7.5 billion GitHub deal

Microsoft has announced that it is buying privately held coding website GitHub Inc for $7.5bn in an all-stock deal to designed to strengthen its cloud computing business and challenge market leader Amazon.

The deal is a big bet on Azure, the company’s fast-growing cloud business, as it will be able to lure more code developers who use GitHub and drive more business to Microsoft.

By pulling off its largest acquisition since the $26bn acquisition of LinkedIn in 2016, Microsoft gets a platform universally known by developers. GitHub calls itself the world’s largest code host with more than 28 million developers using its platform.

After reports of a likely deal between Microsoft and GitHub emerged on Sunday, some users of the software development platform raised doubts on social network Reddit that GitHub would “eventually favour Microsoft products over competing alternatives.”

But Chief Executive Officer Satya Nadella downplayed those concerns by saying that GitHub will continue to be an open platform that works with all public clouds. He said Microsoft will use GitHub to promote company’s own developer tools and use its sales team to speed up adoption of GitHub by its big business customers.

“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 recognise 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.”

GitHub will retain its developer-first ethos and will operate independently to provide an open platform for all developers in all industries, said Microsoft in its statement.

“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.”

The deal reflects the company’s ongoing pivot to open source software and seeks to further broaden its large and growing development community, Moody’s analyst Richard Lane said.

Microsoft vice-president Nat Friedman, founder of Xamarin and an open source veteran, will assume the role of GitHub chief executive. GitHub’s current chief executive, Chris Wanstrath, will become a Microsoft technical fellow working on “strategic software initiatives,” said Microsoft’s statement.

Pictured: Chris Wanstrath, of GitHub, and Microsoft’s Satya Nadella and Nat Friedman