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I don't think the dev tools division has ever been profitable. It's always been done to support their platforms & operating systems.

Microsoft's DevDiv has been a billion dollar a year business for the past 20 years (I know, revenue != profit, but that's a big number to work with)

VS community came out right about when small businesses started really jumping onto LAMP/WAMP for LOB apps.

Not hard to draw the line from there to 'keeping people on IIS and MSSQL'

Not sure if it was the original plan, but vscode is now a sales vector for SaaS.

Yep. Doing Azure-related things is way easier in VS Code than other IDEs because so much deployment functionality is built in. It's still needlessly convoluted though.

Not just that, but “cloud” dev instances in the browser. Push a button, get your dev env set up in a container on Someone Else’s Server, presented through in-browser vscode (though I assume you can connect with regular vscode, too), is the promise.