Microsoft buys GitHub and is more valuable than Google

Microsoft buys GitHub and is more valuable than Google 5th June 2018

I had better start by saying sorry in these times where fake news and misinformation is, rightly, on the agenda. The headline is a bit misleading as it indicates a causality which isn’t there – at least not directly.

Microsoft is not more valuable than Google because it bought GitHub. It was the 29 May that Microsoft’s stock market value surged past Google’s (Microsoft was worth 749 billion dollars, Google 739 billion dollars).

Microsoft and Satya have acknowledged that it is better to nurture all developers

A week later, 4 June, Microsoft bought GitHub – the biggest open source repository.

So, no direct causation: GitHub-buy → Microsoft > Google WRONG!

But, the two news items are somehow related.

The reason why Microsoft’s valuation has surged 40% in the last year – more than five times the gain Google’s mother company Alphabet experienced in the same period – is because Microsoft makes an effort to nurse and care about developers. Hence the willingness to shell out what is reported to be 7.5 billion dollars for GitHub.

This is an investment that will most likely not give Microsoft any profit, but it will give something that long-term is more valuable; an enhancement of the already impressive developer ecosystem that Microsoft has built over many years – and consequently greater developer mindshare.

It’s all about the developers

Microsoft’s Satya Nadella explains it well in this video:

As Satya says, Microsoft wants to accommodate developers as they are building the systems and tools in a wide variety of businesses; tech-related or not.

If developers know you as a provider of good tools and solutions, your company will be well positioned for the future.

Now, I know there are a lot of open source developers who are still quite sceptical about Microsoft’s real intentions with open source. Microsoft’s embrace of open source technology started many years ago – check the history of port25 – but a crucial turning point was in 2012 when Satya Nadella was President of Server and Tools Business. Azure was in Satya’s portfolio and he decided, wisely as time has shown, that in order to attract customers to the Azure-cloud, it should be possible to run all kinds of technologies in Microsoft’s cloud; not only Microsoft technologies.

That year it became possible to spin Linux-virtual machines on Azure, Microsoft’s cloud-platform which at that time had a very modest market share. Now it is only Amazon’s AWS that is bigger than Azure.

Since 2012 there has been a wealth of open source announcements: .Net on Linux, SQL Server on Linux, Bash on Windows, Visual Studio Code etc.

Some will argue that it is just a long embrace-period before Microsoft extends/extinguishes open source, but I believe we are way past that point.

Microsoft and Satya have acknowledged that it is better to nurture all developers.

We probably won’t see Satya Nadella going full Steve Ballmer-crazy on a stage, but it is the “developers, developers, developers” spirit he is channelling – no matter what kind of developer you are.

Dan Mygind

Author: Dan Mygind

Dan is a Journalist and Computer Scientist with a strong interest in technology, technology-related businesses, and the transforming effect source code can have on society.
He has worked for startups, SMEs and global IT-organisations such as IBM as a developer, consultant, and IT-architect. With a solid technology background, he has written extensively for a wide variety of publications such as Computerworld as well as writing technical white papers for Microsoft and other companies.
He is also a published author, ‘World Storytellers

Contact Dan Mygind: mygind{at}writeit{dot}dk

The views expressed are those of the author and do not necessarily reflect the view and opinion of Curo Talent.