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Microsoft-GitHub acquisition shakes up DevOps market

Microsoft's $7.5 billion blockbuster deal for GitHub is a sea change for the IT market, as an enterprise software bellwether with legacy baggage snaps up an open source DevOps darling.

Microsoft's GitHub acquisition represents a seismic shift that has rattled the foundations of the IT industry.

The $7.5 billion blockbuster combines an independent open source player that has been core to the DevOps movement with one of the biggest, if not the biggest, established IT vendor, which has only recently begun to shed its reputation as a proprietary bellwether.

IT industry analysts say they are cautiously optimistic about the all-stock deal, which is expected to clear regulatory hurdles by the end of 2018. Microsoft executives, including Satya Nadella, in a conference call Monday morning pledged that Microsoft will keep GitHub open source and allow it to operate independently.

"Five years ago, this would have been a disaster," said Stephen Elliot, analyst at IDC. "But Microsoft's come a long way, and the enterprise has come a long way, and open source tools are now an accepted strategy."

How Microsoft integrates GitHub will be key in the long run. Elliot said he expects Microsoft to prioritize integrations with Microsoft products, such as the Azure cloud.

"If they handle this properly, they will balance openness with easy on-ramps to Microsoft's other tools," Elliot said. "It's a tricky balancing act, because developers never want to be told what tools to use, but they're always looking for an easier way of doing things."

Chris Wanstrath, GitHub co-founderChris Wanstrath

Microsoft's Nadella emphasized that GitHub users will continue to use the tools and languages of their choice and deploy to any cloud or device. And Microsoft's release of its .NET software development framework and VS Code development tools to open source should reassure users about Microsoft's commitment to preserve GitHub's appeal as an independent vendor, said GitHub co-founder Chris Wanstrath.

Rumblings of concern among GitHub users began last week

The Microsoft-GitHub deal generated buzz around the industry days before its official disclosure, along with wariness about how Microsoft will uphold the values of its new subsidiary.

The stakes are high for users. GitHub is home to more than 28 million developers, from hobbyists to enterprise DevOps teams, and it was unequivocally chosen by DevOps pros as one of the most essential parts of a DevOps toolchain in early 2018. Even in the worst-case scenario, some enterprise IT shops feel they are already too entangled with GitHub to seek alternatives easily.

If they handle this properly, they will balance openness with easy on-ramps to Microsoft's other tools. ... Developers never want to be told what tools to use, but they're always looking for an easier way of doing things.
Stephen Elliotanalyst, IDC

"We won't unplug GitHub in the short term," said Thomas Wong, senior director of enterprise applications at Dolby Laboratories Inc., a sound system products company in San Francisco. The company is a Microsoft shop, but preferred to work with GitHub as a smaller, more nimble, independent company, he said. "Probably within a year it will be clear if the original people at GitHub are being pushed out and we're dealing more with corporate Microsoft."

The Microsoft-GitHub acquisition already has caused an upper management shake-up. GitHub's original CEO, Wanstrath, will step aside, and former Xamarin CEO Nat Friedman will lead the company once the deal closes. Wanstrath said on the conference call that he already stated his intention to step down last year, and remain with the company as a technical advisor. He will now join Microsoft as a technical fellow.

IT veterans have seen this movie before

Longtime IT pros expressed widespread skepticism about the Microsoft-GitHub deal. They have witnessed similar Microsoft acquisitions and heard the company's pledge not to stand in the way of the acquired company's agenda, only to watch it fail to live up to that promise.

"The GitHub purchase might be more suppression than a positive move," said a solutions architect with a large technical service provider. "Microsoft could well pose as though they were going to build up the product, while 'momentarily' halting development until the acquisition is 'assimilated' into the Microsoft fold."

Already anticipating blowback from corporate users that have significantly invested in GitHub, some Microsoft insiders point to the company's track record of democratic cooperation with the open source world.

"People still assume we are trying to control the world. ... In reality we are desperately trying to prove that we are not doing that," said one source. "Buying GitHub is us trying to demonstrate [that we] embrace open source software."

Since Satya Nadella became Microsoft's CEO in early February 2014, one could make the case that the company has tried to partner with, rather than conquer, the open source world.

For instance, last September the company said it had made the largest number of contributions to open source projects that reside on GitHub. Microsoft has also delivered a version of its flagship database product, SQL Server on Linux, that exchanges information with Windows Server through either the cloud or on premises. Microsoft also adapted its .NET development environment and Visual Studio to Linux. The company also supports Windows and Azure for Docker containers and Kubernetes container management.

Next Steps

New to Git and distributed version control? Here are some Git examples and Jenkins-Git integration tutorials designed to help you master the popular source code versioning tool.

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