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Why Microsoft is Acquiring GitHub

Developing relationships with developers and acquiring new talent is a huge opportunity here.

This is one of my favorite acquisition stories so far in 2018. GitHub (notice the cute mascot) really is the Switzerland of code. I’m not going to lie, this might not stay the same after the Microsoft acquisition. Devs have a way of preferring something that feels a bit more brand agnostic and independent.

However it’s also a huge opportunity for Microsoft to develop better relationships with devs, use the data to optimize its AI in the cloud and even cherry pick some of the best developers in the world to create a pipeline of new talent and hires for the AI-route Microsoft will be going.

Microsoft has quietly on a streak of good momentum. It has overtaken even Alphabet (June, 2018) in market cap in the race to be the 1st Trillion dollar company where Apple and Amazon are the inside favorites; and where Tencent (WeChat) is the likely to be the first Chinese tech firm to reach that mark.

Bloomberg

Microsoft Azure is a Titan in the Cloud, and while the firm isn’t in the same league as Google or Amazon; it’s a tech company that’s way more diversified than Facebook or Google who are top-heavy reliant on advertising for their revenue. Microsoft’s current market cap is $759.6 billion. Microsoft has developed key products recently, for China. They also own LinkedIn, who are allowed to operate in China. This gives them a distinct advantage in the future.

Microsoft Acquiring GitHub is a Milestone in Software Development

Microsoft has reportedly been working hard over the past years on its relationship with Windows developers. The deal to officially announced the acquisition is likely to be on June 5th, 2018.

GitHub was valued at $2 Billion in 2015, so as of 2018 it could be anywhere from $4 Billion to perhaps as much as $7 Billion. Satya Nadella recognizes that AI in the cloud requires not just Windows, but Software that can keep them a leader in multiple verticals moving forwards. To compete with the talent acquisition of Google and Amazon, Microsoft needed to do something just like this.

Cortana is a bit like Siri, a bit out of date and Microsoft has thoughtfully partnered with Amazon and especially Alexa for Business has tantalizing promise for enterprise integration. Acquiring GitHub could give Microsoft unique insights and relationship opportunities to onboard some of the best developers in the world.

GitHub is more than just a simple code-hosting service. It’s a community. Business Insider first reported the story, I may actually have been second. Anyway fast forward a few days it’s actually happening. It’s a milestone for software development because here’s access to one of the most valuable groups in the world:

GitHub has “27 million software developers working on 80 million repositories of code,” according to Bloomberg.

That’s 27 million of the most valuable minds on the planet. What can full access to these repositories and people do for how Microsoft understand talent in the software developer vertical? Presumably coupled with the data of LinkedIn, this kind of information can help train Microsoft’s AI and its ability to acquire the right people to build its assault on AI in the cloud and the future. Microsoft, is not necessarily the cool company young developers want to work at.

It’s no secret, Satya Nadella has been actively courting coders since 2014. To compete with Google, Amazon and others it’s not enough that Azure is doing well, Microsoft needs to develop itself as a legitimate brand that can attract top developers more easily. It’s foray into Gaming could be going better, it feels like it’s missing a youth factor.

Back in 2017 Statista did an awesome infographic on the average age of employees. You would not be shocked therefore, that Microsoft falls way down on the list. In the world of tech, you don’t want your average employee to be necessarily 33 years OLD. This is exactly the sort of reason Microsoft will acquire GitHub.

Statista via Business Insider
  • How old are is the average age of developers on GitHub do you imagine?

If you are interested in software development, I found an amazing developer survey in 2017 here. While developers run the entire gamut, in this survey 88% of them were male and it’s pretty much recognized many developers do their best work in their mid to late 20s (since the field is so dynamic).

As TechCrunch points out, not all developers are thrilled at the prospect of GitHub being acquired. It’s somewhat of an affront on the independent status of software repositories. As Big Tech continues the expansion of their influence on America and the world, it does feel sometimes as if wealth inequality and the rise of technology companies are correlated.

GitHub has a very loyal community and the worst case scenario is this could really doom it as an ecosystem after Microsoft’s acquisition. This has happend in the past to solutions and communities acquired by Microsoft. Those familiar with the details have said talks between GitHub and Microsoft have been on-going for quite some time.

How do you feel about the news, is it good for GitHub and its vacant CEO position, and will devs jump ship and seek an “indie” alternative now?