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Comment by hawski | Hacker News Reader

I don't fully understand point 2.

Is just making GitHub better worth $7.5 billion dollars for Microsoft? It will stay independent for this pile of cash? Why they bought it? For prestige?

For me the answer is that it can't be independent for long as it was (with VCs on its back was it ever?). It will gain Live login, maybe they will integrate it so you could login with your GitHub credentials to your computer if you so desire. But that's hardly worth billions.

Maybe the better thing would be what others suggested - setup a non-profit that would run GitHub and all those big companies could put something in the jar. Certainly less than what was paid. But I know it can't work, VCs want their exit.

For me it's a same game for GitLab. Current situation probably will accelerate GitLab's burn rate so prepare for the next acquisition.

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Answers are here for you - https://blogs.microsoft.com/blog/2018/06/04/microsoft-github...

I'm posting them here for easy ref -

1. "Second, we will accelerate enterprise developers’ use of GitHub, with our direct sales and partner channels and access to Microsoft’s global cloud infrastructure and services. "

Above means - More revenue for MS.

2. "Finally, we will bring Microsoft’s developer tools and services to new audiences."

This also means - more revenue for MS

More answers here - https://view.officeapps.live.com/op/view.aspx?src=https://c....

Briefing above ppt here - MS will report Github revenues as some part of Azure. They are looking for growth and diversification of income sources. Linkedin and this acquisition are steps in that direction.

Thank you for information.

So integrating tools and services means dependence.

Disclaimer: I don't have a strong reaction against this acquisition. I always felt that one day I will migrate somewhere, but I'm not in a hurry.

Integration can refer to better interoperability, not just dependence.

Think of a large, non-tech company (i.e. development is a "resource" and not a first class citizen) that already has an Enterprise license for Office 365, which handles their emails, Office apps, and Active Directory for authentication. Microsoft could sell Github Enterprise as a one-click install that spins it up on Azure and hooks into the existing O365 AD for user management. No long procurement process, vendor has already been vetted (Microsoft), same privacy/compliance validation as your O365-hosted Exchange server, etc. Devs in these environments just went from an uphill battle to get Github approved for hosting repos to Github becoming the preferred solution.

And the inverse is true. Microsoft makes some incredibly good development tools. Traditionally, they've been limited to a Windows only model. But they've been making a lot of strides in making their traditionally Windows-only stuff cross-compatible. And Github is a really good channel/brand to try to get that software in front of users that may not have otherwise ever even looked at that Microsoft tooling.

Let’s not forget that Github came out of rails which was/is a rather SaaS oriented community, and struggled to build out an enterprise sales team that could deliver and market the on-site product to large corps. Microsoft has sales channels into almost every enterprise in the world and can sell a lot more github installations than github could by itself. Github is simply worth way more inside of Microsoft than it was outside.

> Github is simply worth way more inside of Microsoft than it was outside.

I don't think you can call it inside of MS while you are also highlighting their strength of sales channels. It would be described better that way if MS kept it solely for internal purposes

Within my finance circle, there is big discussion on why Microsoft did an all-stock deal and the substantiated rumour through the grapevine is that the $7.5billion acquisition was Microsoft's way of releasing a chunk of stock without having to go through the public market. Read what you will of it but interesting viewpoint nevertheless.

This is all about getting Azure in front of developers who aren't in the Microsoft ecosystem.

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