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Why Microsoft is buying GitHub in $7.5 billion deal

Microsoft has confirmed reports that it is acquiring software development platform GitHub.

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Despite Microsoft’s recent decision to open its arms to open source, there are plenty of sceptics, especially within the GitHub community.

GitHub has been struggling to replace Chris Wanstrath since he stepped down from his role as CEO almost a year ago.

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 said GitHub will retain its “developer-first ethos”, operate independently and remain an open platform.

So what’s in this for Microsoft? By buying the company – and keeping it out of competitors’ hands – Microsoft is looking to participate in “every stage of development”, officials said today. But Julie Lerman, a GitHub user who works as a Microsoft liaison with freelance developers, cautiously welcomed the partnership.

GitHub was founded a decade ago as a platform for developers to share code. The company also says that it will beef up GitHub’s paid enterprise side by using its own sales and partner channels to sell GitHub’s services. Buying the company will help Microsoft become a central part of many software developers’ lives without requiring it to introduce new products or features of its own. Microsoft should instead focus on making all other developer tools they offer (Visual Studio, Visual Studio Code, etc.) work better with GitHub.

Over the past few years, GitHub and Microsoft were having conversations to pursue acquisition but nothing materialized. A spokesperson said the company had nothing to share on that front, especially since the deal has yet to receive regulatory approval.

In early May, Microsoft revealed a new partnership with GitHub that was meant to bring the power of Azure DevOps services to GitHub users.

Despite Microsoft’s embrace of open-source, GitHub users are split on an acquisition. It also benefits from a powerful network effect-as more developers have joined it, GitHub has become even more attractive to other coders.

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When contacted about the reported acquisition, a spokesperson for Microsoft told Gizmodo that the company “doesn’t comment on rumors or speculation”.

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