Microsoft Acquires GitHub for $7.5B

Microsoft announced on Monday that it will acquire GitHub, the open source software development platform for $7.5 billion in a deal that is expected to be finalized by the end of the year.

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In a press release announcing the acquisition, Microsoft promised to remain committed to the open source nature of the platform and to support developers at every stage of the development lifecycle. The company also stated that it would continue the trend of increasing enterprise-level development on GitHub, integrating Microsoft direct sales as well as partner sales channels with the platform.

Founded in 2008 by Chris Wanstrath, the San Francisco-based GitHub has been a leading platform among software developers and programmers looking to produce open source projects. Developers “commit” updates to their code and can solicit the help of the larger community. The company’s user base grew exponentially since its founding. According to the latest statistics released by GitHub, the company has more than 28 million developers in its community and over 80 million code repositories.

Many software teams at the world’s most successful tech companies use GitHub to collaborate and review code on multiple development projects at a time.

Prior to the acquisition GitHub raised $350 million in funding and was valued at about $2 billion. The company drew revenue from a paid subscription plan, with prices ranging from $7 to $21 per month per user. Despite its large user base and broad applications, the company has never turned a profit.

When the acquisition closes at the end of 2018, Microsoft will install Nat Friedman, founder of Xamarin, as CEO. Wanstrath will serve as a Microsoft technical fellow. Both men will report to Microsoft EVP Scott Guthrie, who is in charge of Microsoft’s Cloud and AI Group.

The change in the leadership structure of the acquired company, many industry analysts noted, is similar to Microsoft’s approach when acquiring LinkedIn and may portend a similar partnership between the Microsoft and Github in the future.