In what could be a big boost for its cloud computing business, Microsoft Corp. Monday morning confirmed reports over the weekend that it’s acquiring the open-source software development platform GitHub.

The purchase price is a stunning $7.5 billion, close to four times GitHub’s most recent valuation of $2 billion following a funding round in 2015. The price for GitHub, which provides a code repository and documentation hosting service for open-source software developers, reflects its pole position among software developers.

It claims some of the biggest customers in the technology industry, including Apple Inc., Facebook Inc., Google Inc., IBM Corp. and many more. However, the site’s biggest contributor is in fact Microsoft itself, with more than 1,000 of its employees said to be actively writing code for projects hosted on the site.

Bloomberg said GitHub has been searching for a new chief executive officer for the past nine months since founder Chris Wanstrath stepped down and is currently unprofitable. GitHub told CNBC last fall that it was expecting to book more than $200 million in subscription revenue, including more than $110 million from companies using its enterprise product. Microsoft said the deal won’t produce profits until 2020, but it doesn’t expect a significant impact on earnings.

Microsoft was once considered to be the archnemesis of open-source software, but it has increasingly embraced the idea since its current Chief Executive Satya Nadella took over the top job back in 2014. With Nadella at the helm, the company has pursued a policy of aggressively recruiting open-source developers. Its also donated numerous software to the open-source community, including Visual Studio Code, PowerShell and the Microsoft Edge JavaScript Engine.

Microsoft GitHub’s CEO will be Microsoft vice president Nat Friedman, who was founder of Xamarin, which the software giant bought in 2016. Friedman will continue to report to Microsoft Cloud + AI Group Executive Vice President Scott Guthrie. Chris Wanstrath will be a technical fellow at Microsoft.

A key reason Microsoft was willing to pay this much for GitHub is the chance to persuade many more developers to build applications and services atop its Azure public cloud computing service. Indeed, among the three opportunities Nadella outlined were to “accelerate enterprise developers’ use of GitHub, with our direct sales and partner channels and access to Microsoft’s global cloud infrastructure and services” and “bring Microsoft’s developer tools and services to new audiences.”

“It’s really validation of … how important developers have become in deciding which cloud to use,” Sid Sijbrandij, co-founder and CEO of GitHub rival GitLab Inc., told SiliconANGLE.

Nonetheless, many in the community are up in arms over the prospect of their former enemy taking control of what is one the most important open-source properties on the web. Opponents of the deal took to Twitter to voice their opposition, with claims that Microsoft cannot be trusted and that the acquisition would ultimately spell doom for GitHub:

This is bad for Software, as a whole, bad for Github and honestly kind of seems bad for Microsoft (potentially expensive yet zero synergy with their products). MS simply cant be trusted the way a neutral entity like Github can. Would Google host code here? https://t.co/4pgUui5NOI

— mcc (@mcclure111) June 3, 2018

Here lies the millennial Open Source movement. It never had any f***s to give, not about licensing, not about the political issues, and not about its own history. It never cared even to know its enemies, and so it never saw them coming.

RIP Github.https://t.co/P1byCSMCER

— ☭🚀🐕 Bodil 🐕🚀☭ (@bodil) June 3, 2018

Nadella himself sought to address those concerns with an insistence that the acquisition shows the company is committed to open source.

“Microsoft is all-in on open source,” he said in his post. “We have been on a journey with open source, and today we are active in the open source ecosystem, we contribute to open source projects, and some of our most vibrant developer tools and frameworks are open source. When it comes to our commitment to open source, judge us by the actions we have taken in the recent past, our actions today, and in the future.”

Others wondered about Microsoft’s renewed power in software, particularly since Microsoft also owns LinkedIn, potentially giving it a huge leg up in the field of technical recruiting. SiliconANGLE’s own co-CEO John Furrier mused that GitHub is in a sense LinkedIn for developers, so there’s a logical fit even beyond the code repository itself.

Some backlash already appears to be happening. GitHub rival GitLab said Monday that it’s seeing 10 times the number of software code repositories moving to GitLab as normal. GitLab’s Sidbrandij said the company scaled up its servers three times over the weekend to handle the load. He said GitLab has been focused more on enterprise developers, offering a more integrated set of services such as continuous integration, a practice of merging developer copies of code to a shared repository several times a day.

Nonetheless, no small number of people offered a milder response, saying that these fears are unfounded in light of Microsoft’s cultural changes during Nadella’s tenure:

I often sit and think Microsoft missing the mobile era was the best thing that ever happened to it. Microsoft is far more customer focused, competitive, and embracing other platforms / open source now. The old Microsoft was, let’s face it, a bit of an asshole. Culture has changed

— Tom Warren (@tomwarren) June 3, 2018

Rob Enderle, principal analyst of Enderle Group, offered a similar assessment, telling SiliconANGLE that these concerns may have been realistic in the old days, but not so much now.

“If this was Steve Ballmer’s Microsoft, particularly in the early years, the open source concerns would be valid,” Enderle said. “But even before Steve left, Microsoft had already embraced the [open-source] concept and Satya Nadella is a big believer, so today, those concerns are largely unfounded.”

By acquiring GitHub, Microsoft likely will boost its prestige among open-source developers, other analysts believe. GitHub is critical for developers because it’s the primary vehicle for them to collaborate and share ideas. More importantly for Microsoft, perhaps, the acquisition gives it the opportunity to integrate its cloud and development tools more closely with some of the most popular open-source projects, a factor Nadella mentioned in the blog post.

“Github has made it possible to be at the corner and center of any new application development these days,” Holger Mueller, principal analyst and vice president at Constellation Research Inc., told SiliconANGLE. “For Microsoft it means that it now owns an asset which matters to most developers. It also gives Microsoft the opportunity to make all the code run as a trial demo, test system or developer system on Azure. That alone means massive scale for Azure, and growth that powers massive economies of scale, which lead to lower total cost of ownership for Azure.”

Patrick Moorhead, principal analyst at Moor Insights & Strategy, agreed, saying that Microsoft really wants to become a kind of “one-stop shop” for developers. “Acquiring GitHub helps them with this but more strategically, and gives easier access to Azure services and tools,” he said.

The acquisition is also a huge win for venture capital firm Andreessen Horowitz, which invested $100 million in the company six years ago in what was its largest investment at the time.

With reporting from Robert Hof

Image: Microsoft