Microsoft may be in for a case of post-purchase dissonance after paying US$7.5 billion (NZ$10.8 billion) for GitHub to then stand accused by its community of being complicit in Trump’s Mexican border travesty.
A small storm in a very large teacup has emerged after a group of 97 politically minded developers threatened to pull their projects from GitHub, taking umbrage with Microsoft supplying services to the US Immigration and Customs Enforcement (ICE) Agency.
Open letters have been posted by both sides, but have fallen short of Microsoft CEO Satya Nadella saying “OK see ya” (as his predecessor might have).
Political controversy and hot-head developers aside, what exactly is GitHub?
The original Git, as well as being an ‘unpleasant or contemptible person’, is also an open-source software version control system, initially developed by Linus Torvalds, the creator of Linux (an alternative to the Windows operating system). Git works its magic when developers create and update application code by keeping track of subsequent code revisions. With GitHub, Git versioning meets the convenience of cloud storage.
“The Linux community are staunch open-sourcers and anti-Microsofters. Most of them use GitHub. Many of them are ill-tempered, vociferous and tethered to social media.”
For larger apps with tens of thousands or even millions of lines of code, staying on top of code changes can quickly become nightmarish. GitHub allows developers to track revisions and store modified code in a centralised hub.
A side-benefit to the Git and Hub marriage is that it becomes far less complicated for developers to collaborate. With GitHub, they can co-work on projects, download application components, make their particular changes and upload back onto the project on GitHub. All the developers involved can see any changes and contribute their own.
The other appealing thing with GitHub is its ability to track and undo changes. Being able to keep track of changes and roll-back any that didn’t work out adds hugely to its appeal.
With some development teams consisting of dozens to hundreds of coders, spread across geographies, the potential for mayhem is sizeable. In short, Github provides a consistent and scalable platform for disparate groups working together.
And therein lies some clues behind the headlines. The Linux community are staunch open-sourcers and anti-Microsofters. Most of them use GitHub. Many of them are ill-tempered, vociferous and tethered to social media. The ‘evil death star’ (as they view Microsoft) now owns a key part of their world. Add a political storm in a Trump America and all the ingredients are in place.
So why was Microsoft so brave as to buy GitHub?
For large enterprises like Microsoft, the reasons to acquire fall into one of two categories: financial or strategic.
Financial rationales are what most businesses typically look at with acquisitions. Balance sheet, P&L, EBITDA, share value etc etc are the language of typical M&A activity.
Not so in the new economy where strategic value has prompted massive valuations against poor or even loss-making financials. Value is more about the size of the user community, or how a company’s product or positioning in the market can bolster (or block) another company’s performance. The strategic value of a company is more about market position and potential than financials.
Microsoft’s acquisition of Github falls squarely into the strategic category.
With some 27 million users (minus the 97 perhaps) maintaining 80 million projects on GitHub, it presents a sizeable strategic opportunity for Microsoft. Open source fans or not, the developer community is very important to Microsoft. Getting GitHub’s legions of developers onboard and using Microsoft developer tools provides the type of long term lock-in global corporations love. If they can win the community over it will create even more momentum for community-built gains for Microsoft tools and platforms.
So the US$7.5 billion valuation was justified, but one thing Microsoft surely must also have figured on with the acquisition was the risk of developer activists rebelling and causing PR nightmares.
Hence the well managed response from the top. At the time the group’s open letter was posted, Microsoft CEO Satya Nadella had already sharply criticised the Trump administration’s “zero tolerance” immigration policy. Nadella responded by clarifying (to all staff) that Microsoft has zero involvement with ICE or US Customs and Border Protection on immigration policies and that their current cloud engagement is limited to e-mail, calendar, messaging and document management. He conveniently ignores earlier projects that Microsoft had promoted around facial recognition and artificial intelligence tools for ICE which were the source of the original scandal.
Microsoft now appears to be hunkering down and waiting for the publicity storm to pass. With the actual number of irate users representing a tiny fraction of total GitHub users, this may prove a better strategy than icing their accounts.
Photo credit: Ice Man, Marvel Comics
This article was originally published on iStart.