GitHub was and is the dominant everything in devtools. Hard to fathom how much devs use github, probably more than all other devtool products combined, really more than anything except their editor/IDE/terminal
Microsoft just bought the center of an ecosystem growing at incredible pace (number of devs doubles every 5 years)
Github has 29m users (including all 6 of my accounts!). That’s more devs than there were in the world when GitHub started
Supporting the open source ecosystem is way more important to MS than anything else - the revenue they make from hosting OSS-based apps on Azure in the future will dwarf their current devtools revenue.
(Also, Microsoft is clearly not the microsoft of yore. This isn’t the same company that hated on open source in the 90s and early 2000s, mostly because they it’s symbiotic to their hosting business. They didn’t start supporting open source from altruism!)
Enterprise: probably half (spitballing?) of GitHub’s revenue is on-prem. MS is amazing at on-prem: sales, service, all their enterprise customers. Are they the biggest seller of software to enterprise? Not sure but seems right.
MS has opportunity to make GitHub massively profitable amongst their enterprise customers. This was something that Atlassian was doing a much better job at. Not a happy day over there I’d say.
Look for one-click install of GitHub Enterprise on Azure in the future.
Ecosystem: GitHub didn’t value partners and partnerships for many years. Took a long time to care about platform. Despite that, GitHub has a huge platform that all the companies in the space integrate with.
MS has a great reputation around partnerships and platform. Very likely to keep pushing on this.
On the other hand, they have a suite of devtools on Azure which competes with lots of devtools companies. Wonder what will happen there.
Financials: This is a great acquisition for GitHub. Seems they were at about $130m annual revenue, so this is nearly a 50x multiple (which is very high, for those who don’t follow those things).
For comparison, New Relic valued at $6B now, with revenues of $355m. Twilio worth $5.5B at $400m revenue.
This is the biggest devtools acquisition by far. Heroku was $250m, Xamarin was ~$500m.
Speaking of Xamarin, Nat Friedman takes over as GitHub CEO. This is great - Nat is a class act, will make a great CEO for a company that has had quite a tumultuous time getting here.
GitHub's 100m Series A was seen to be an outrageously expensive investment from A16Z, who are taking home ~$1B on an investment of ~$150m. Good returns!
Assuming even split, the 3 founders definitely taking home >$1B each. Employees probably splitting $1.5B, lots of new angels minted who love devtools
/Fin. (PS I don’t speak for @circleci or Dark here, just for myself. Also, check out my new company Dark: darklang.com)
