Exploring Microsoft's Acquisition Of Github

Back in June, Microsoft laid its hands on Github, the heaven of programmers and with that acquisition, an amazing number of memes to welcome the Redmond based company. Microsoft is actually backtracking on all its previous methods and ways. Steve Ballmer is well known for his hate against Github and now Microsoft buys it in the name of open source software. Steve Ballmer called Linux a "cancer" but recently Microsoft has joined hands with the Linux Foundation. Talk about a change of views.

It's clearly obvious that Satya Nadella is a much more poised and open-minded CEO compared to Steve, who believed in radical decision making. That isn't to say that Steve was wrong with his approach towards things, after all, he was the mastermind of most of the products that have been perfected by Satya today. We are now seeing a divergence and a completely new Microsoft from what it was before.

Despite their small failure with Nokia (Okay, so it wasn't so small), Microsoft is making amends with its latest acquisition as the company has shifted its focus largely towards the enterprise market. From dominance in cloud computing with groundbreaking revenues as well as success in terms of HoloLens and more for the Augmented Reality applications etc.

Back in 2016, I explored and hinted why LinkedIn was bought by Microsoft for a whopping $26 Billion. This year again, I will be jotting down my thoughts as to why Microsoft bought Github and what is its significance to some other significant products in their portfolio:

Quarterly Revenue Figures

Let's analyze this year's 3 quarterly revenue figures and compare them with the respective previous periods:

  • In Q1 2018, Microsoft's revenue stood at $24.5 Billion, that's an increase of 12% and exceeded revenue expectations in the cloud market.
  • In Q2 2018, the revenue stood at $28.9 Billion, that's another increase of 12%.
  • In Q3 2018, the revenue stood at $26.8 Billion, that's a staggering yearly growth of 16%.
And if you want a graph on it, here it is:

Just like last time, I am making a prediction about the Q4 revenues. But unlike last time, FY18 Q4 earnings would be greater than the previous respective quarter due to Microsoft's strong showing in a number business sectors. Let's explore this in detail:

Why Github?

Github has more than 28 million users and it proudly boasts the largest repository of source code on the planet. Microsoft alone has near 2000 repositories over there dealing with various products. Github is one of the essential websites which almost every programmer has to use, particularly in Version Control (alongside Git) of a project. Version Control is defined as a management of changes to a document, file or code which can be tracked in real time and can be revised as needed in case a new version encounters bugs. It is also one of the most essential tools for a software engineer, especially in regards to Quality Assurance.

With LinkedIn, Microsoft had the data, metrics, and expertise of professionals in almost every field of life. With Github, Microsoft is targetting a much much more specific audience and those are developers, which will solely be responsible for much of the innovation in the coming years. From college projects to indie studios and then corporate companies, almost each and every programming project related to some problem statement has its code repository at Github. 
This is where all the programs and code related to emerging technologies like Artificial Intelligence, Machine Learning, Augmented Reality, Virtual Reality, and more will turn up. It's a win-win for Microsoft since they are going to be at the center of it all.
Despite backlash from programmers, Github combined with Microsoft's other products will create an ultimate platform. Add to that, Github doesn't make a lot of money to be fair, rather in the first of 2016, it faced a staggering $66 million loss.

LinkedIn + Github = Match Made In Heaven

With LinkedIn and Github, Microsoft wants to own your work interests and keep an eye on the evolving trends of jobs and corporate culture. Facebook, Instagram, and Twitter are covering the social aspect of our lives, Google knows our everyday interests whereas Amazon strives for our desires to suggest the most suitable product. It has been very rightly summed up by John Koetsier on Forbes that Facebook has control of our social graph, Google has control of our interest graph and Amazon controls the retail graph. But Microsoft will now handle the professional aspect with these platforms in their hands now. 

Think about it. Microsoft already had access to hiring data and the recruiters' interests. Now it has access to the largest developers repositories. Add a little bit of Machine Learning to that, the results could be endless.
From targeted advertisements to linking developers with specific companies related to their research work and projects, Microsoft is capable of transforming both of these platforms in ways that could never have been possible before.
All this will ultimately contribute towards a successful FY18 Q4 and the revenue could be significantly higher than the predicted one. With that being said, it has to be noted that Microsoft is intent on letting Github live as an independent platform like it did with LinkedIn in 2016. But for how long? Time will tell.

What are your thoughts on Microsoft's $7.5 Billion acquisition of Github? What are the possibilities available to them? Will this be a negative impact on Github or the developer community? Sign off in the comments below.

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