Microsoft-GitHub acquisition quid pro quo
Microsoft will acquire software development platform GitHub.
Originally, they considered a joint marketing campaign worth just $35 million, but discussions had reached investment and/or acquisition last week.
And on Monday, the tech giant announced that it would buy GitHub for $7.5 billion. This will be Microsoft’s second-largest acquisition, following its purchase of LinkedIn for $26 billion.
Reports previously showed that GitHub was valued at $2 billion and their asking price would be around $5 billion; needless to say, they cashed out on Monday.
GitHub hosts 23 million users, who use the platform to store and post updates of their code. It is also a discussion forum where users can ask questions about their code. Even companies like FiveThirtyEight and the New York Times use the platform to store their data.
The acquisition will supply Microsoft with a massive world of developers that it can court to develop programs. Essentially, this is the perfect human resources hiring tool for Microsoft. It also helps grow their computing cloud business Azure significantly.
Furthermore, this will also be beneficial to GitHub. After CEO and founder Chris Wanstrath stepped down last August, GitHub has struggled to fill this leadership hole. If the acquisition goes through, Microsoft executive Nat Friedman is said to be the next leader of the software development platform.
Microsoft’s purchase of GitHub will be beneficial to both companies. In a time where Microsoft, Apple, and Google are all closely competing with one another, every business decision is crucial. This may give Microsoft an edge over its tech rivals.
Featured image via Flickr/othree