Microsoft Has Reportedly Resumed Talks To Buy GitHub

Microsoft has resumed in earnest talks to buy leading open source code repository GitHub, according to a report published Friday in Business Insider.

The world's largest software maker, once exclusively a bastion of proprietary technology, would position itself as an even more influential player in open source communities if it took control of the San Francisco-based startup, which provides a global platform for developers to share code and mutually contribute to projects, according to partners.

Sources identified as close to both companies told the business publication that Microsoft has been flirting with GitHub in recent years, but the last few weeks have seen a serious resumption of negotiations that had broken off several times before.

[Related: GitHub Upgrades Client Capabilities To Streamline Developer Workflows]

Sponsored post

The potential deal suggests GitHub is shying away from widely reported plans for an IPO. That change in course is thought related to challenges in replacing Chris Wanstrath as CEO—the GitHub co-founder has stayed on in the top job since announcing his resignation last August.

GitHub raised a total of $250 million in 2015, valuing the company at $2 billion.

Microsoft developed and operated CodePlex, once GitHub's primary competitor. But last year the company shut down the code-sharing service it launched in 2006.

Upon shuttering CodePlex, Microsoft came to an agreement with GitHub to enable developers using its platform to migrate code to the rival repository so as not to stymie their work.

Reed Wiedower, CTO of New Signature, a Microsoft partner based in Washington, D.C., said in the last two years, to support its open source contributions, Microsoft became "very invested in GitHub."

Microsoft's Visual Studio Code, a source code editor, is the open source project with the most contributors on GitHub.

Microsoft scaled to software dominance by maintaining a tight grip over a closed ecosystem, but in recent years has been heavily investing in open source projects.

Those efforts include open sourcing the .NET development and PowerShell configuration management frameworks, developing Azure Sphere, a Linux-based operating system for Internet of Things and introducing Linux to its Azure Cloud.

"All of this makes an acquisition of GitHub strategic to Microsoft itself and reinforces their need to be the center of the development universe," Wiedower said.

GitHub's push into the channel began in earnest in 2012, when it launched an enterprise-focused version of its platform that runs behind an organization's firewall, enabling admins to manage and control access to code.

In 2016, GitHub launched a channel program and cast a net for enterprise partners to drive its expansion.

While GitHub began as a place for developers to collaborate on open source projects, by that point it was used by many large enterprises with advanced software development practices.

GitHub primarily partners with system integrators and small boutique firms that can provide services that large customers need for moving code onto the repository. Those partners often migrate large amounts of code from other repositories and audit the code using security tools.

The benefits of a GitHub acquisition could be substantial for Microsoft's Azure cloud, said Tom Kieffer, CEO of Virteva, a Microsoft partner based in Minneapolis. GitHub users are typically more oriented toward Amazon Web Services than Azure, Kieffer told CRN.

By "associating" that GitHub "non-enterprise coding community" with Azure, Microsoft could change the default orientation of such developers away from AWS and gain their "exposure and collaboration with the typically enterprise-oriented Azure crowd."

"With [Infrastructure-as-a-Service] and even [Platform-as-a-Service] becoming more ubiquitous and commoditized every day, the real value has migrated to the next layer— code," Kieffer said. "GitHub is code.