Microsoft Acquires GitHub! What – Too Soon?

GitHub-Mark-120px-plus.pngMy, my, what a difference a decade makes. Or for some, maybe not. Ten years ago, Microsoft was led by Steve Ballmer, who very much viewed open source as the barbarian at the software giant’s gates. The feeling was emphatically reciprocated by most in the free and open source (FOSS) community, which viewed Microsoft as a threat to the very existence of FOSS. And if Ballmer had been able to have his way back then, they would probably have been right.

But he didn’t, and of course, he couldn’t. Not only because the FOSS and open source communities are diffuse and therefore immune from shotgun targeting – rather like colonial minute men popping away at the redcoats from behind trees – but because the rest of the tech industry had already opted to embrace the collaborative development model.

They did so not only because it made good business sense, but because finally, after twenty years, an approach had come along that might allow them to do collectively what none of them had succeeded in accomplishing separately – break the dominance of Microsoft over the enterprise. That approach hadn’t emerged from some high-paid consultant or Fortune 100 brain trust, but from a shaggy-bearded zealot named Richard Stallman and an irreverent Finn named Linus Torvalds that at first they had not taken seriously. They should have, because after all, Bill Gates had benefited from similarly blithe assumptions when he blew past IBM a decade and a half before.

Happily, and perhaps for Microsoft most of all, the software bully of 2008 is a very different company today. Ballmer moved on four years ago, and his successor, Satya Nadella set a far different course from his predecessor. Along the way, he brought Microsoft into the Linux Foundation as a Platinum Member. Today, Microsoft is a top-level member of multiple key LF projects (disclosure: LF is a long-term client of mine).

That Nadella was able to turn the culture of Microsoft around to this degree is remarkable, particularly since he is in large part a product of that same corporate culture, coming on board in 1992. But in truth only someone from inside the Microsoft family would have had the street cred to pull off such a dramatic reversal. And in fact, a more evolutionary and subversive effect was simultaneously undermining the Ballmer way: every young programmer today knows about open source software. It’s second nature to shop around GitHub for a widget to plug in rather than writing something from scratch. How can something so convenient be evil? And without a common-enemy bogeyman like SCO to rally against, the community no longer feels threatened. Don’t worry; be coding.

To be sure, Microsoft was already becoming less monolithic even before Ballmer moved on. It’s been decades since a brilliant, brash Bill Gates browbeat engineers that couldn’t keep up with him 100% of the time. Brad Smith, President since 2015, also played a role in this transition. He joined the company in 1993, only a year after Nadella. By 2002 he had risen to the post of General Counsel, a crucial role as the US and EC regulatory assaults on the company were approaching a climax. As much a diplomat and politician as a lawyer, it was Smith who persuaded Gates and Ballmer to make peace.

How much of a diplomat? Here’s a small example. Back in the mid-oughts of the new millennium, I was one of the major on-line proponents of ODF – the OpenDocument Format, a standard which at the time threatened to break Microsoft’s 20-year control of the desktop. I was invited to be part of a four person discussion on stage at one of the early conferences in San Francisco. To his credit, Smith agreed to participate, despite the obviously hostile audience he would face.

During a break before we came on, Smith somehow located me in the crowd of 3,000 at Moscone Center and chatted me up. It didn’t stop me from pushing him as hard as Microsoft deserved to be pushed back then when we went on stage, but he knew that it’s harder to give hell to someone you’ve just exchanged pleasantries with than it is to confront a face you’ve only seen in photographs.

Still, for some members of the FOSS community, old fears die hard. Despite what (to me) seems like consistent, credible support by Microsoft for open source ever since Nadella took the helm, many long-time FOSSers are uneasy. According to MarketWatch, some maintainers started to move their projects off GitHub while Microsoft’s acquisition was still only a rumor.

How big an exodus that may become remains unclear. Only a small number of the current 85 million libraries on GitHub are meaningful in the marketplace. I don’t see the acquisition having any impact on large, corporate-funded projects, as Microsoft is now a member of as many of them as any of its competitors. But the decisions the important, primarily community-led projects make may be another story. That’s a matter of concern for Microsoft rather than the FOSS community, though, as GitHub is not unique. Anyone that is distrustful of Microsoft’s intentions can easily and quickly migrate to robust alternatives like GitLab and Bitbucket.

Independent of legacy issues, there’s the question of whether ownership by Microsoft will be a good or a bad thing for GitHub as a business. It’s never been profitable to date, and there’s no particular reason to assume Microsoft will be able to change that. The fate of non-profitable businesses has always been uncertain post-merger, with more failing than flourishing. Even profitable companies are often neglected, as the acquirer’s management, strategic direction, or profitability change. The commercial landscape is littered with hundreds of interesting acquired companies that were later shut down, worst, resold, or spun out in dramatically reduced form.

The more interesting question, though, is why Microsoft acquired GitHub at all. True, Microsoft’s success has historically been based on becoming platform of choice, and it’s spent big bucks in the past on platforms – like Explorer – that weren’t direct revenue producers. Unlike a proprietary web browser, though, it’s hard to see what advantage hosting open source software can deliver. It’s not sticky, like the cloud, or easy to distinguish from the competition.

So why buy a perennially money-losing platform that’s easy to desert at all? According to Satya Nadella in his blog post today at Microsoft, it’s because developers are at the center of the digital universe, “And GitHub is their home” (of course, a classic video of an over-heated Steve Ballmer chanting “Developers! Developers!” is part of Internet history). And Microsoft does have plans to make itself first among equals when it comes to ease of use. As noted by TechCrunch:

Unsurprisingly, while the core of GitHub won’t change, Microsoft does plan to extend GitHub’s enterprise services and integrate them with its own sales and partner channels. And Nadella noted that the company will use GitHub to bring Microsoft’s developer tools and services “to new audiences.”

Nadella went on to say:

Most importantly, we recognize the responsibility we take on with this agreement. We are committed to being stewards of the GitHub community, which will retain its developer-first ethos, operate independently and remain an open platform. We will always listen to developer feedback and invest in both fundamentals and new capabilities.

There’s also comfort to be taken that GitHub will continue to operate independently, although Microsoft also announced that GutHub would have a new CEO – Xamarin founder Nat Friedman. But in a blog post and during a conference call with journalists, Microsoft stressed that GitHub would remain an open, technology-neutral platform.

What that tells me is that Microsoft has not only well and truly gotten on the open source bus, but that it was willing to pay $7.5 billion dollars to prove that the bad old days are over. If it goes back on that pledge, it will be the one that suffers. It’s been many a year since Microsoft was the place where every developer wanted to work, and selling the FOSS community short would be a heck of a black mark against it at hiring time. And open source projects operate on a meritocratic basis. Everyone has to earn a place at the table to influence the result.

So for my part, I’m inclined to conclude that this acquisition is all good. I’ve spent most of my career in a world where large parts of the technology community viewed Microsoft as the enemy. I’d much prefer to spend the rest of my working days it in a world where Microsoft is seen as a friend.

P.S: One interesting aspect of the GitHub deal I haven’t seen anyone comment on yet is the fact that Microsoft chose to pay stock rather than cash for GitHub. Why does that matter? Because when a company with a cash hoard the size of Microsoft’s elects to use its stock instead of cash to buy a company, it means it thinks its stock is over-valued, and likely to fall in price rather than under-valued and likely to rise. It may also mean that it expects the market’s reaction in the near term to the purchase to be negative rather than positive.

Time and the stock ticker will tell whether Microsoft played its hand wisely or otherwise.

Comments (4)

  1. I hope that you are correct in your conclusion, but fear that it might become a case of: Do you want an ad with that app, or an app with this ad? There must be a financial aspect to this transaction that we are missing – do you want that in BankCoin or RussCoin?

    • @minrich, I’m inclined to be hopeful here, although to be sure a range of less-honorable motives on Microsoft’s part are possible to imagine. Over the last decade, in part because of the lack of a common enemy with the demise of SCO, fewer programmers have strong feelings about previously quasi-religious matters, such as choice of license. Indeed, many who set up a new repository at GitHub or or any of the other forges don’t even bother to choose a license at all. So if I was inclined to imagine a malign motivation, it would be that Microsoft would be seeking to take advantage of this loosening trend and try to steer both the philosophy as well as the method of collaborative development subtly down a different path that it found more to its liking.

      But to what purpose? The major rewards today for the biggest IT companies come from being able to influence important projects through meritocratic means, and Microsoft is in excellent field position to perform well in that type of game, with its tens of thousands of well-funded developers. It’s pretty clear today that the best way for Microsoft to beat its competitors is by joining them and take advantage of its strengths.

      So, sure, we need to wait and see. But if I were Nadella, I’d figure that I have a lot more to gain by being a real steward of GitHub than by trying to covertly subvert or redirect it.

  2. Are you and I the only people that can log into this site since 1/27/18?

    It would be great if the consortiuminfo home page showed new blog posts, rather than having to click on ‘More Entries’.


    • @minrich: Argh.

      The first thing to know is that this site was built way back in 2002 using Dreamweaver by someone who was learning as he went along. The second is that the blog spent its first decade on Geeklog, an open source blogging platform that petered out. So the many hundreds of blog posts, graphics, and categories all had to be moved over to Drupal. The third is that the site has multiple, very large, highly indexed databases, created by the guy on his learner’s permit during the early days of the Web.

      Put that all together and what I’ve got is a creaky old monster that always has something that needs to be fixed, and when that’s fixed, it frequently breaks something else which isn’t necessarily noticed until someone like you notices, and, well, you get the idea. Thanks for spotting that and we’ll hopefully get it fixed tonight.

      As to just you and me, this has never been a heavy comment platform, not because comments aren’t welcome, but because for, whatever reason, it hasn’t attracted a lot of comments. Also, due to all the live comment spammers and spambots out there, I generally turn off the comment option after a week or so, as otherwise the garbage starts to accumulate.

      Anyway, thanks for your continuing interest and support.

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