StashLearn
Financial education, no lectures.

Follow and listen to our podcast

Get the app
Teach MeMoney NewsMoney TalkStash
Money News

What’s Github and Why is Microsoft Buying It?

June 04, 2018

  • Software giant Microsoft will purchase Github for $7.5 billion
  • Github is an open-source code library used by millions of developers
  • The acquisition could help Microsoft branch out and stay relevant to new users
2 min read

Big news for open-source code developers.

Redmond, Washington-based software giant Microsoft announced Monday it will purchase Github, a storehouse of open-source code, for a reported $7.5 billion.

Microsoft, founded by Bill Gates, is the creator of the Windows operating system (OS), one of the world’s most popular computer software platforms.

Github, founded in 2008, is frequently described as “Google Docs for developers,” which allows programmers around the globe to collaborate on and store software code in a central library. It achieved a valuation of $2 billion in 2015, placing it in the category of so-called unicorns, startups that reach a company valuation of $1 billion or more.

Microsoft’s purchase of Github will allow it to evolve and continue offering new products and services as customers shift to the cloud and demand new ways to access software development services, according to reports.

What is Github?

Github is primarily an open-source repository of more than 85 million pieces of code, reportedly used by tens of millions of programmers.

As opposed to proprietary code–such as the Windows OS–open source code is free and open to any developer to tweak and adapt. One of the best-known open source operating systems is called Linux.

Github’s service is free to most users, but it has an enterprise version for businesses, for which it charges money. Businesses can also combine proprietary and open-source development on Github using private repositories.

Github raised $350 million from prominent venture capital investors including Andreessen Horowitz and Sequoia Capital, according to industry sources.

Microsoft’s purchase of Github will allow it to evolve and continue offering new products and services as customers shift to the cloud and demand new ways to access software development services

Why did Microsoft buy Github?

While Apple frequently gets a lot of attention in the tech world for its own operating system, not to mention its sleek and shiny products that often push the envelope where technology is concerned, Microsoft still has a much larger market share in the computing world.

In fact, Microsoft controls close to 90% of the operating system market. (An operating system is the software brains of a computer, or handheld device, that powers all of the other programs.)

Microsoft has also developed a sizable presence in the cloud computing space. The cloud allows computer users to access programs and storage through a distributed network of computers. Microsoft’s suite of cloud-based products and services includes storage as well as application creation.

In recent years, Microsoft CEO Satya Nadella has attempted to shift the company’s focus away from an exclusive focus on its proprietary operating system to one that includes Linux, according to reports.

“More than 28 million developers already collaborate on GitHub, and it is home to more than 85 million code repositories used by people in nearly every country,” Nadella wrote on Microsoft’s blog Monday. “From the largest corporations to the smallest startups, GitHub is the destination for developers to learn, share and work together to create software.”

Microsoft’s latest expensive acquisition

Although the $7.5 billion price tag for Github may seem like a lot, it’s not Microsoft’s most expensive acquisition–not by a long shot. In 2016, it purchased the social networking site Linkedin for a staggering $26 billion. It also purchased online video service Skype for $8.5 billion in 2011.

With annual revenue of $90 billion, Microsoft is one of the biggest companies in the U.S., ranking number 30 on the Fortune 500 list for 2018.

If investing in the world of technology intrigues you, check out Stash’s exchange traded funds, and single stocks here.

 

*image is for illustrative purpose only.

By Jeremy Quittner
Jeremy Quittner is the senior writer for Stash.

Next for you
Breaking News: The Internet Is Still Really, Really Important
Explore more articlesChoose a topic to learn more about
Careers market news love and money pop culture politics
Disclaimers

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.