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Google Was Bidding Against Microsoft For GitHub, Report Says

The code sharing service had many suitors, but Microsoft's agreement to pay 25x on revenue topped Google's offer, CNBC reports

Microsoft's $7.5 billion offer for GitHub beat out Google in a bidding contest, according to a report Tuesday from CNBC.

The Mountain View, Calif.-based internet giant, a subsidiary of Alphabet, was simultaneously talking to GitHub in the weeks leading up to Microsoft's deal, but Microsoft prevailed in part by agreeing to pay a 25-times multiple on GitHub's $300 million annual revenue.

GitHub CEO Chris Wanstrath's relationship with Microsoft CEO Satya Nadella was another factor in Microsoft ultimately securing the deal over its cloud rival, the business news network said

[Related: Microsoft CEO Satya Nadella: 5 Things You Need To Know About $7.5B GitHub Deal]

Microsoft had been flirting with a potential GitHub deal for a couple years, but the last few weeks saw a serious resumption of negotiations between the two companies that had broken off several times before.

In addition to Microsoft and Google, GitHub had fielded interest in the past from Amazon, Tencent, and Atlassian, CNBC reported.

While GitHub is the go-to code management repository for open source developers, it has seen strong growth in its enterprise business.

GitHub generated $100 million in sales last year with its enterprise offering, which installs the git code-management platform behind the user's firewall.

Microsoft partners told CRN the Redmond, Wash.-based software giant was the best choice for GitHub because of its enterprise reach, as well as some natural synergies.

A likely point of product integration is with Visual Studio Team Services, the online version of Team Foundation Server, a source code management platform that includes a git repository, said Nick Colyer, practice manager for cloud management and automation at AHEAD, a Microsoft and GitHub partner.

"You have to look at the other assets they have and see how this asset plugs into those," said Ric Opal, vice president at Oak Brook, Ill.-based SWC Technology Partners.

Microsoft's $26.2 billion acquisition of LinkedIn in 2016 creates interesting opportunities down the road for advancing the larger Microsoft ecosystem, Opal said.

The combination of Lynda.com, a learning tools platform bought by LinkedIn, and LinkedIn career development capabilities, with GitHub's open source repository could attract a new generation of software professionals entering the workforce into Microsoft's ecosystem, Opal said.

"It's a boon for their cloud. It is also a significant opportunity if they tie the other assets—professional development tools and open source," Opal told CRN.

GitHub had struggled in finding a replacement for Wanstrath, who had tried to step down as CEO last year. Leadership challenges were part of the reason the company shied away from a potential public offering, according to media reports.

Microsoft has resolved the leadership issue by naming Corporate Vice President Nat Friedman -- the founder of mobile app development platform Xamarin, acquired by Microsoft in 2016 -- as Wanstrath's replacement.

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