Confirmed: Microsoft buys GitHub in $7.5bn deal

A deal GitHub founders and backers could scarcely refuse

Microsoft has confirmed the acquisition of GitHub in a deal that has been pinned at $7.5 billion.

It comes after a weekend of rising speculation that Microsoft had scooped up the popular development platform used by more than 23 million developers in one million organisations across the world.

While the company doesn't publish financials, Bloomberg suggested that it achieved revenues of $98 million for the first nine months of 2016, but posted a loss of $66 million.

It's the information that matters in that Github purchase, IMO. Microsoft will know what every developer in the world is up to, how they work, when they work, what tools they use

That was a year after the company had raised $250 million in venture funding in a round led by major Silicon Valley investor Sequoia Capital, which valued the company at around $2 billion.

While Microsoft is far from popular with the kind of people who typically use GitHub, it is nevertheless a major contributor to the site, with more than 1,000 staff activity pushing code to GitHub repositories, according to The Verge. It should be noted, though, that code pushed to GitHub isn't necessarily all open source.

Microsoft is also one of the users of the open source Git version-control system. It helps manage the development of the Windows operating system, among other applications at Microsoft, and the company has also open sourced a wide variety of its own software code on GitHub, including PowerShell, Visual Studio and the JavaScript engine used in the Microsoft Edge web browser.

Commenting on why Microsoft might have decided to scoop up GitHub - and for so much - CJ Silverio, chief technology officer of npm, suggested that, like with the $26bn LinkedIn purchase, it was all about information.

"It's the information that matters in that GitHub purchase, in my opinion. Microsoft will know what every developer in the world is up to, how they work, when they work, what tools they use... Wanna sell things to developers? Microsoft will know what to sell and how," she tweeted.

However, Microsoft rivals might become more circumspect about using GitHub, even if many ordinary developers decide that moving to alternative platforms is too much trouble.

Not surprisingly, many in the developer community were not entirely delighted when news of the deal leaked over the weekend.

"I for one welcome our new Microsoft Overlords. I think they will be great stewards of GitHub. I trust no giant company more when it comes to developer tools," tweeted Russell Ivanovic, chief product officer at app maker Pocketcasts.

Many were less concerned, though. "People who are upset at Microsoft buying GitHub have no clue about the history of Microsoft. #developersdevelopersdevelopers," wrote John Graham-Cumming, chief technology officer of Cloudflare.

And JavaScript cover and blogger Axel Rauschmayer suggested that it was inevitable: "I'm disappointed that GitHub couldn't find a sustainable business model, given how popular they are. I have always felt uneasy about all the free web hosting they were doing. Few things are ever really free," he tweeted.

GitHub is, essentially, a collaboration tool for programmers to collaborate on projects, based on Git, the open-source version-control software written by Linux creator Linus Torvalds and other Linux developers.

Developers open sourcing their code can use GitHub for free, while users developing closed-source applications are required to pay a fee.

"GitHub built a community of programmers around Git and many open source contributors consider GitHub too big to fail," according to Jacques Mattheij, technology blogger and owner of streaming webcam technology site ww.com.

Work on the development of the GitHub platform was started in October 2007 and the site launched by co-founders Tom Preston-Werner, Chris Wanstrath and PJ Hyett in April 2008.