What does Microsoft stand to gain by acquiring GitHub for $7.5 billion?

GitHub has been described as a “Google Docs for developers” – that’s a pretty powerful comparison. For example, when a developer wants to update an app, they use GitHub to download the existing code, make changes, and then re-upload the new version of code as an update. GitHub is used by both developers and non-developers as a space to collaborate around the world on various code-based projects. The community is composed of people with ideas to improve software and developers willing to take on the task of realizing these improvements. So what exactly does Microsoft have to gain by acquiring it?

GitHub announced its acquisition by Microsoft for $7.5 billion. This is the tech giant’s second-biggest acquisition after their $26.5 billion LinkedIn acquisition in June of 2016. While the exact reason for Microsoft’s acquisition is uncertain, three different conclusions can be drawn from the market and Microsoft’s perceived value of GitHub.

1. To gain trust from the open source community.

Microsoft has had a bad reputation when it comes to their acceptance of open source software. Leaked internal documents back in 1998 showed that Microsoft employees had concerns about open source software, such as Linux, posing a threat to Microsoft’s long-term business model. Microsoft has also been criticized for using open source platforms as a way to lure users to its own platforms. By acquiring GitHub, Microsoft may be hoping to regain the trust of the open source developer community.

2. Microsoft may be moving towards open source

In recent years, there have been rumors that Microsoft may be moving to an open-source version of Windows. By acquiring GitHub, this could be Microsoft’s attempt to connect with developers and introduce open-source Windows. With Windows generating about 10% of Microsoft’s revenue, open source may change the minds of the developer community, and generate more business for Microsoft in the long-run, as the developer community only continues to grow.

3. Open source Monitoring

A large concern among the open source community is Microsoft’s potential ability to monitor the community’s software development. In doing so, the tech giant could find the best and most innovative projects within the community, and create their own versions of these projects to lead the development industry. With a community of over 26 million users, there is an abundance of skilled developers and interesting projects within Github. Many concerned developers may be leaving GitHub for its competitors. GitLab, a GitHub competitor, has seen a huge spike in traffic since the beginning of Microsoft acquisition rumors.

Just as with LinkedIn, we’ll have to wait and see what Microsoft’s bigger, long-term path is, but one thing we can conclude for certain is that Microsoft has plans that stretch beyond operating systems and workplace software, and it will be interesting to see how those unfold and evolve.