Rumoured acquisition could be announced today

Microsoft is set to acquire code repository GitHub as early as today, according to Bloomberg, citing sources close to the planned acquisition.

The company is one of the biggest contributors to the popular code repository and as Microsoft CEO Satya Nadella increased the company’s focus on in-house development on Linux, extended reach with the developer community would be strategic.

The rumoured acquisition sent a flurry of developers to rival site GitLab, which announced that it was seeing 10 times the normal daily amount of repositories moving to the site: “We’re scaling our fleet to try to stay up” it added.

In a letter of “congratulations” to GitHub, the repository (which has users including NASA, IBM and SpaceX) described developers as the “new kingmakers” but warned of the consequences of a takeover, saying: “GitHub has earned mindshare within the developer community, and Microsoft’s acquisition is certainly an attempt to garner and cultivate that mindshare. However, the long term strategic implication seems to be that Microsoft wants to use GitHub as a means to drive Azure adoption.”

The company added: “Developer tools have a high capacity for driving cloud usage. Once you have your application code hosted, the natural next step is to need a place to deploy it. Today, Microsoft fosters cloud adoption by tightly coupling Azure, it’s cloud service, together with Microsoft Visual Studio Team Services, it’s set of development tools. Microsoft will likely integrate GitHub into VSTS in order to take advantage of the strong tie with Azure.”

Sale Preferred Over IPO

GitHub was founded in San Francisco, California in October 2007 by Tom Preston-Werner, Chris Wanstrath, and PJ Hyett. The coding repository has over 80 million repositories hosted on the site, with more than 27 million people worldwide learning, building and sharing software on it over the past decade.

GitHub was last valued at $2 billion (approx. £1.5 billion) in 2015. The VC-backed company had also been rumoured to be examining the possibility of an IPO.

One source told Bloomberg that GitHub “preferred selling the company to going public” and chose Microsoft due to the positive impression CEO Nadella made to the startup.

Microsoft had previously talked to GitHub and its 27 million software developers who developed the 80 million coding repositories on and off for a couple of years despite talks of a partnership between both parties which transitioned to an acquisition.

The response to Microsoft’s acquisition of GitHub has divided opinion between coders and software developers on Reddit, where a thread about the rumoured acquisition rapidly drew thousands of comments.

One user, filleduchaos, wrote: “Personally it’s not about Microsoft, it’s about any non-independent party having de facto control over source control. GitHub and Gitlab and others are good in large part because version control repo hosting is their only business. There’s no other corporate interest or goal (no matter how well-intentioned) to shape the platform.”

They added: “Now Github is saddled with the ponderous weight of a mega-corporation’s bottom line. Changes will happen because Microsoft wants them. And while they may all be changes the community likes, there’s still something off about a giant tech company being the one to make those decisions. Not to mention that MS will inevitably want to somehow integrate it with the rest of its offerings, which…no.”

There are other code repository alternatives that are available to software developers that can be used as an alternative to GitHub which includes Bitbucket, SourceForge, GitLab, Kiln, and Codeplane.

Computer Business Review has contacted both parties for comment.