Microsoft Github Acquisition
Microsoft is making bold moves into the tech-sphere, with the recent acquisition of GitHub. It had been rumored to be in the works for quite some time now and has now finally come to fruition. The move to acquire GitHub, world’s largest source code platform, came after deliberation about what value it can bring to the table. From a developer stand-point, integrations with Microsoft mean positive things as they can finally innovate with developer feedback in mind. Microsoft acquires GitHub to become one of the leading innovators in the tech sphere.
“Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation. We recognize the community responsibility we take on with this agreement and will do our best work to empower every developer to build, innovate and solve the world’s most pressing challenges.” – Satya Nadella, CEO, Microsoft.
If Microsoft is to enter the next phase of growth and development, they need to tap into the vast repository of information that’s present in GitHub. Having access to conversations, key problem-solution areas and more, can help Microsoft enhance its own product line. This can have a huge impact on the way they brainstorm, innovate and launch products to beta-testers. The developer community can provide innumerable insights to Microsoft, making it a net-positive acquisition on their part.
Talent Pool & Engineering
When it comes to acquiring skills and talent, Microsoft can take advantage of it via the GitHub deal. The platform has great ties with developers across the world, with their own engineers working on innovative products. Much of what the $7.5 Billion represents is the potential of expansion for the platform.
Microsoft may even shift a few engineers around to be able to better enhance its own platforms. Microsoft hasn’t been in the smartphone and AI game as aggressively as it should have been. It’s at the top when it comes to B2B applications but B2C is where it’s lacking. With a failed acquisition of Nokia and many disbelievers of the Windows Mobile experience, GitHub should be a direct line into the developer community.
Scale within the community
GitHub has more than 28 million members on its platform, making it the premier choice for developers across the board. With its rapidly expanding userbase, Microsoft hopes to scale within the developer community. When it comes to coding, software development, and future tech enhancements, GitHub has strategic partnerships across various business networks as well.
These partnerships will help get Microsoft in the door, to provide more leverage within conversations that occur in these key businesses. From a purely valuation and growth stand-point, GitHub makes a lot of sense. However, from a scale and community stand-point, it makes more sense to Microsoft to invest.
Retention of ethos and brand
Microsoft has assured developers that GitHub will proceed as planned and there will no changes to the platform. However, it may not be completely the case. There may be a few employees moved around, and a few new projects that the companies will be working together on. There is also a large scope available in terms of attracting new talent. Those unfamiliar with GitHub can get notifications on Windows platforms and vice-versa. This new community of developers, that may traditionally use alternatives to Microsoft, might try out their latest innovations. This increases scale and word of mouth within the community.
One of the biggest reasons why Microsoft opted to retain most of the existing team is to enable a fluid environment within the organization. They don’t want to change too much and bring value where value is needed the most.
Microsoft has also publicly stated that it will actively push the enterprise version of GitHub to its existing client base via their sales and marketing channels. This will add revenue advantages as Microsoft invests further in the platform.
Data-mining and innovation
With LinkedIn, they had access to the world’s largest B2B community, and with GitHub they have access to the world’s largest community of developers. The amount of data that’s present within these platforms is immense. Data-mining can prove to be a valuable asset, especially since these conversations are happening on a public platform and are highly relevant to each industry.
For GitHub, software coding has always been a collaborative event with more emphasis being given towards innovation than proprietorship. Everyone in the software startup space has some form of repository on GitHub, giving access to millions of coders. These coders can create innovative and out of the box solutions to various challenges and develop new code on top of the existing one.
Innovation is driven further when Microsoft can analyze much of what’s shared on these platforms, giving it a majority on the ‘software conversations’ domain. Since it can’t compete with Google and Apple on search or content, it can compete on conversations. This is a great strategy for Microsoft who wants to explore more options in the near future.
Strengthening the cloud
Microsoft has been building the cloud from the ground up, making headways via acquisition and partnerships. They’ve been successful at building much of their products on the cloud platform and have introduced innovations that are scaling well. Everything from Cortana to Open Source technologies. While previous CEOs may not have seen the vision in Open Source, Satya sees tremendous scope.
Microsoft is already the largest organization on GitHub right now, with more than 1800 repositories. They understand the value that the platform brings. Valued at $2 Billion in 2015, it’s $7.5 Billion valuation makes sense considering the scale that the platform has developed. Microsoft could leverage that scale and push its cloud platform to the next level.
Capturing new developers is the main challenge when competing with other giants like Google. That’s why GitHub makes sense for Microsoft, who can focus on attracting a wider net of developers to leverage the cloud on their platforms. Since these developers are working with some of the largest firms in the world, it opens up a whole range of opportunities for Microsoft to enter new markets. While previously, Microsoft may not have been seen as a tech player, with the acquisition it has cemented its position.
Microsoft is making bold moves into the developer and business communities, thereby leveraging itself as a major tech player in the marketplace. With LinkedIn and GitHub in their checklist, they’re pushing towards community – which has been an untapped market as of now. While most tech giants opt for tech acuity or talent pool, Microsoft is making investments in business-focused communities.
With the GitHub acquisition, Microsoft aims to strengthen developer relationships and learn from what’s happening out there in the tech world. This should help them innovate much faster, with better tech community interactions.