Microsoft has reportedly acquired GitHub, and could announce the deal as early as Monday. Bloomberg reports that the software giant has agreed to acquire GitHub, and that the company chose Microsoft partly because of CEO Satya Nadella. Business Insider first reported that Microsoft had been in talks with GitHub recently. GitHub is a vast code repository that has become popular with developers and companies hosting their projects, documentation, and code. Apple, Amazon, Google, and many other big tech companies use GitHub. Microsoft is the top contributor to the site, and has more than 1,000 employees actively pushing code to repositories on GitHub. Microsoft even hosts its own original Windows File Manager source code on GitHub. The service was last valued at $2 billion back in 2015, but it’s not clear exactly how much Microsoft has paid to acquire GitHub. Microsoft loves open source now Microsoft has been rapidly investing in open source technology since Satya Nadella took over the CEO role. Microsoft has open sourced PowerShell, Visual Studio Code, and the Microsoft Edge JavaScript engine. Microsoft also partnered with Canonical to bring Ubuntu to Windows 10, and acquired Xamarin to assist with mobile app development. Microsoft is also using the open source Git version control system for Windows development, and the company even brought SQL Server to Linux. Microsoft’s Visual Studio Code, which lets developers build and debug web and cloud applications, has soared in popularity with developers. Microsoft’s GitHub acquisition will likely mean we’ll start to see even closer integration between Microsoft’s developer tools and the service. At Build last month, Microsoft continued its close work with GitHub by integrating the service into the company’s App Center for developers. There will likely be questions around Microsoft’s GitHub acquisition, especially among some open source advocates who are wary of Microsoft’s involvement. If Microsoft does indeed announce this acquisition on Monday then developers won’t have too long to wait to get a better idea of Microsoft’s GitHub plans.<doc-sep>After a week of rumors, Microsoft today confirmed that it has acquired GitHub, the popular Git-based code sharing and collaboration service. The price of the acquisition was $7.5 billion in Microsoft stock. GitHub raised $350 million and we know that the company was valued at about $2 billion in 2015. Former Xamarin CEO Nat Friedman (and now Microsoft corporate vice president) will become GitHub’s CEO. GitHub founder and former CEO Chris Wanstrath will become a Microsoft technical fellow and work on strategic software initiatives. Wanstrath had retaken his CEO role after his co-founder Tom Preston-Werner resigned following a harassment investigation in 2014. The fact that Microsoft is installing a new CEO for GitHub is a clear sign that the company’s approach to integrating GitHub will be similar to how it is working with LinkedIn. “GitHub will retain its developer-first ethos and will operate independently to provide an open platform for all developers in all industries,” a Microsoft spokesperson told us. GitHub says that as of March 2018, there were 28 million developers in its community, and 85 million code repositories, making it the largest host of source code globally and a cornerstone of how many in the tech world build software. But despite its popularity with enterprise users, individual developers and open source projects, GitHub has never turned a profit and chances are the company decided that an acquisition was preferable over trying to IPO. GitHub’s main revenue source today is paid accounts, which allows for private repositories and a number of other features that enterprises need, with pricing ranging from $7 per user per month to $21/user/month. Those building public and open source projects can use it for free. While numerous large enterprises use GitHub as their code-sharing service of choice, it also faces quite a bit of competition in this space thanks to products like GitLab and Atlassian’s Bitbucket, as well as a wide range of other enterprise-centric code-hosting tools. Microsoft is acquiring GitHub because it’s a perfect fit for its own ambitions to be the go-to platform for every developer, and every developer need, no matter the platform. Microsoft has long embraced the Git protocol and is using it in its current Visual Studio Team Services product, which itself used to compete with GitHub’s enterprise service. Knowing GitHub’s position with developers, Microsoft has also leaned on the service quite a bit itself, too and some in the company already claim it is the biggest contributor to GitHub today. Yet while Microsoft’s stance toward open source has changed over the last few years, many open source developers will keep a very close look at what the company will do with GitHub after the acquisition. That’s because there is a lot of distrust of Microsoft in this cohort, which is understandable given Microsoft’s history. In fact, TechCrunch received a tip on Friday, which noted not only that the deal had already closed, but that open source software maintainers were already eyeing up alternatives and looking potentially to abandon GitHub in the wake of the deal. Some developers (not just those working in open source) were not wasting time even to wait for a confirmation of the deal before migrating. While GitHub is home to more than just open source software, if such a migration came to pass, it would be a very bad look both for GitHub and Microsoft. And, it would a particularly ironic turn, given the very origins of Git: the versioning control system was created by Linus Torvalds in 2005 when he was working on development of the Linux kernel, in part as a response to a previous system, BitKeeper, changing its terms away from being free to use. The new Microsoft under CEO Satya Nadella strikes us as a very different company from the Microsoft of ten years ago — especially given that the new Microsoft has embraced open source — but it’s hard to forget its earlier history of trying to suppress Linux. “Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation,” said Nadella in today’s announcement. “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.” Yet at the same time, it’s worth remembering that Microsoft is now a member of the Linux Foundation and regularly backs a number of open source projects. And Windows now has the Linux subsystem while VS Code, the company’s free code editing tool is open source and available on GitHub, as are .NET Core and numerous other Microsoft-led projects. And many in the company were defending Microsoft’s commitment to GitHub and its principles, even before the deal was announced. I don't think people understand how many of us at Microsoft love GitHub to the bottom of our hearts. If anybody decided to mess with that community, there would be a riot to say the least — Mat Velloso (@matvelloso) June 4, 2018 Still, you can’t help but wonder how Microsoft might leverage GitHub within its wider business strategy, which could see the company build stronger bridges between GitHub and Azure, its cloud hosting service, and its wide array of software and collaboration products. Microsoft is no stranger to ingesting huge companies. One of them, LinkedIn, might be another area where Microsoft might explore synergies, specifically around areas like recruitment and online tutorials and education.<doc-sep>Bigger than Nokia and Minecraft, smaller than LinkedIn and Skype. And nowhere near Yahoo, but that doesn’t count because it wasn’t completed. That is how Microsoft’s agreement to acquire GitHub for $7.5 billion fits into the Redmond tech giant’s history of acquisitions, as reflected in our ranking above. Assuming it goes through, the deal would be the third-largest in Microsoft’s history, behind its $26.2 billion purchase of LinkedIn and $8.5 billion acquisition of Skype. (Microsoft’s ill-fated 2008 bid for Yahoo was more than $44 billion.) Unlike LinkedIn and Skype, which were all-cash deals, Microsoft is funding the acquisition of GitHub entirely with stock, taking advantage of the run-up in its share price. Microsoft stock topped $100/share last Friday and closed today at $101.67, another new all-time high, following the announcement of the GitHub deal. More Coverage<doc-sep>
Microsoft on Monday announced plans to acquire software developer platform GitHub in a deal valued at $7.5 billion. GitHub was valued at $2 billion in its last funding round in 2015, though it has yet to turn a profit. Microsoft has seen its once-dominant Windows unit slip in market share in recent years, spurring a cloud-first reorganization and sending Microsoft looking for alternatives to court developers. "Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation," Microsoft CEO Satya Nadella said in a statement. "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." Microsoft vice president Nat Friedman will assume the role of GitHub CEO, the company said. He takes over for the developer platform's founder Chris Wanstrath, who stepped down 10 months ago. "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." GitHub's tools have become essential to software developers, who use it to store code, keep track of updates and discuss issues. The privately held company has more than 23 million individual users in more than 1.5 million organizations. It was on track to book more than $200 million in subscription revenue, including more than $110 million from companies using its enterprise product, GitHub told CNBC last fall. The platform has been named to CNBC's Disruptor List five times. GitHub's financials will be reported under Microsoft's Intelligent Cloud segment. The tie-up will "accelerate enterprise use of GitHub and bring Microsoft's developer tools and services to new audiences," Microsoft said. Microsoft has reportedly flirted with buying GitHub in the past, including in 2016, although GitHub denied those reports. A partnership could give Microsoft another connection point to the developers it needs to court in order to build applications on its various platforms, including the Azure cloud. Microsoft could also use data from GitHub to improve its artificial intelligence products. Microsoft doesn't expect to make money off the deal until 2020 but said it will have minimal negative impact on earnings. Talks to acquire GitHub were first reported Friday by Business Insider. The deal is expected to close by the end of 2018, Microsoft said. —CNBC's Jordan Novet contributed to this story.