Shulou(Shulou.com)06/03 Report--

In early June, Microsoft officially announced the acquisition of GitHub for $7.5 billion. Apart from Microsoft and GitHub, perhaps the most concerned about the merger is Microsoft's city foe, Amazon. In my opinion, GitHub is probably the best acquisition in Microsoft's history.

Is 7.5 billion dollars expensive? It's obviously not cheap. Of the 210th public acquisitions in Microsoft's history, GitHub ranks only behind LinkedIn's $26.2 billion and Skype's $8.5 billion, roughly the same as Nokia's $7.2 billion.

Currently, GitHub has about 20 million users (almost all of them developers) and about 57 million code repositories, so Microsoft has to pay $375 per user to get them. Is it worth it? Given that GitHub earns a mere $110 million a year, Microsoft probably won't be able to get back $7.5 billion directly from those 20 million users.

As a reference, Facebook paid only $42 per user when it bought Whatsapp in 2014.

However, unlike the acquisitions of Skype and Nokia, Microsoft's competitors, including Amazon, Google, Oracle, IBM and so on, may not necessarily think that Microsoft has made a bad choice. In fact, these giants may be quite uncomfortable, and perhaps the most uncomfortable of them is Amazon. Because GitHub users are the most important and strategically valuable resource for Amazon-developers (Developers).

Marc Andreessen (yes, the bald head who made the Netscape Netscape browser), the founding partner of the famous venture capital firm A16Z, said a quote that was quoted countless times in 2011: "Software is eating the."

World. "(software is eating the world)

Later, another person said "Every business will become a software business." (all enterprises will become software enterprises). The person who says this sentence is called Satya Nadella. Microsoft CEO.

What Satya said in 2015 happens to be a footnote to Microsoft's acquisition of GitHub today. GitHub is the most important code base in the world, or "code drag platform". Almost all open source and open source projects can be found here, and about 20 million developers contribute code here, share it with other developers, or participate in other developers' projects. In fact, GitHub has become a community where most developers live.

For programmers, GitHub is certainly an ideal place to spend leisure weekends and "the largest platform for friends in the world". However, Microsoft as a commercial company, the company's investment decisions must be for commercial interests, so what are the commercial benefits of acquiring GitHub? What is Microsoft's purpose of spending $7.5 billion on a lossmaking company with just $110 million in annual revenue? Why should Amazon care?

Around 2010 (memory may be biased), I took an online course on Entrepreneurship (Entrepreneurship Education) at Stanford. The first two hours of the course are about how to obtain all the programming tools and experimental environments of the course through Amazon Cloud Service (Amazon Web Service,AWS) and cloud platform provider Heroku. I suddenly realized that if all entrepreneurs and developers first choose a cloud platform when starting a business or development, then it is likely that they will always use this cloud platform, and it will be quite difficult to change the platform. Then, services like Amazon's AWS and Heroku will have strong user stickiness, especially when the business of entrepreneurs and developers continues to expand, AWS and Heroku can drive a lot of cloud business. If Stanford's MOOC promotes both AWS and Heroku in the course, it can be expected that the latter two will grow very fast.

Not long after, Heroku was acquired by another cloud computing giant, Salesforce, for $250 million.

Amazon, relying on the strong growth of its cloud computing business, has seen its share price rise more than tenfold since 2010.

(if you think it's good that Apple's share price has more than tripled, then Amazon has increased more than 11 times over the same period, while the S & P index of the US market has only increased by 50%, and the Chinese stock market over the same period. Don't mention it.)

Microsoft, which has always ignored cloud computing, has completely shifted its business to cloud computing since Satya Nadella became CEO in 2014. Last year, the revenue of cloud-based Office365 exceeded that of traditional Office. But in the area of cloud computing infrastructure, at the heart of the Amazon cloud, Microsoft is growing rapidly, but it is still a long way off:

(market share of cloud computing)

As can be seen in the chart above, although the market share of Microsoft's cloud computing business is growing rapidly, from less than 8% more than two years ago to 12% now, but there is still a huge gap between Amazon, which is far ahead (the other two that maintain rapid growth are Google and China's Aliyun). This chart represents a market opportunity of more than $100 billion a year and is the biggest growth opportunity for the entire IT industry.

In order to catch up with Amazon's huge advantage in cloud computing, buying GitHub is a good choice. GitHub not only brings Microsoft closer to (many rival) developers, but more importantly, it allows Microsoft to promote its cloud service, Azure Cloud, to developers. GitHub is essentially a tool for storing code, and most of today's code runs on some form of cloud, and Microsoft can easily provide an interface specifically for Azure cloud on GitHub, making it easier for code to run on Azure cloud. The code running on the cloud is actually individual applications, so Microsoft has actually booked the future application running environment on its own cloud.

When we created Xingyun in 2016, the idea was to create a cloud platform that would make it easier for developers to deploy and run code on the cloud. It is not enough to save code like GitHub, but more importantly, to create a very convenient environment in which developers can quickly publish code to any cloud to become a runnable application without having to worry about the underlying complex infrastructure.

So, in a sense, what Microsoft will do in the future after the acquisition of GitHub is what we are trying to do in Xingyun, but we do not intend to bind it to Microsoft's Azure cloud, but provide users with Aliyun, AWS, Tencent Cloud, Huawei Cloud and other options.

So what were we thinking when Microsoft bought GitHub?

On the one hand, we are glad to believe what we believe, and the giants have begun to believe, or at least recognize our choice again. On the other hand, the giants will certainly do what we want to do, which will be a great challenge, and not only Microsoft, but other giants will also join the competition, although we have a little first-mover advantage, but the investment of the giants is 10 million times that of us, so we must focus more and implement harder in order to create value for users and hope to create cool products. The goal of changing the world by the way.

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