Microsoft to buy GitHub for $7.5B in move to strengthen cloud business: 5 things to know

Microsoft has reached an agreement to acquire open-source code repository GitHub in a move company officials say will build on the tech giant's cloud computing business. Microsoft currently ranks the No. 2 supplier of cloud services, following Amazon as its top competitor.

"Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation," Satya Nadella, CEO of Microsoft, said in the company's June 4 statement about the pending acquisition.

Here are five things to know about the deal:

1. Microsoft plans to acquire GitHub for $7.5 billion in Microsoft stock and close the deal by the end of calendar year 2018. GitHub will become a part of the company's Intelligent Cloud unit.

2. GitHub is a popular software development platform, boasting more than 28 million users on its web-based hosting service. These developers use GitHub to store and collaborate on open-source code and programming projects across a range of industries.

3. Microsoft sees the GitHub acquisition as an avenue to strengthen its cloud business, Azure, according to Reuters. Analysts who spoke with The New York Times also suggested the acquisition would support Microsoft's relationship with programmers, as the company plans to make almost all of its software development and cloud computing tools available for use on GitHub.

4. Some developers are concerned GitHub will begin favoring Microsoft products after the acquisition. Since June 3, when rumors about the GitHub acquisition were first reported by Bloomberg, competing code repository GitLab indicated it has experienced a marked increase in repositories moving to its platform, according to Gizmodo.

In its June 4 statement, Microsoft said GitHub will continue to "provide an open platform for all developers in all industries" and developers will continue to "be able to use the programming languages, tools and operating systems of their choice for their projects … and will still be able to deploy their code to any operating system, any cloud and any device."

5. Under the agreement, GitHub will continue to operate independently, Microsoft has stated. Microsoft Corporate Vice President Nat Friedman will assume the post of GitHub CEO, while current GitHub CEO Chris Wanstrath will transition to a role as a Microsoft technical fellow.

"I'm extremely proud of what GitHub and our community have accomplished over the past decade, and I can't wait to see what lies ahead,” Mr. Wanstrath said in Microsoft's statement. As part of his new role, Mr. Wanstrath will work on "strategic software initiatives" and report to Microsoft Executive Vice President Scott Guthrie.

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