On Monday, Microsoft confirmed media reports that it's buying GitHub, which runs a very popular platform for sharing, reviewing and storing software code. The software giant is issuing $7.5 billion in stock to buy GitHub, while also promising to carry out "an incremental stock buyback" to offset the share dilution caused by the deal.
The purchase is the latest in a string of moves Microsoft has made during the Satya Nadella era to strengthen its ties with developers -- including ones writing for platforms other than Windows. Look for Microsoft to now find ways to better integrate GitHub with its massive Visual Studio developer tool suite, as well as its fast-growing Azure cloud platform, as it tries to better compete with Amazon.com's (AMZN) - Get Report AWS and others.
However, CEO Satya Nadella's remarks about the deal suggest Microsoft was motivated not only by product synergies, but also by a desire to more generally become a larger provider of software and services to developers as enterprise software spending keeps rising at a much faster pace than IT spending in general. That could motivate the company, which has a massive domestic cash balance in the wake of tax reform, to ink additional deals to buy platforms that are popular with web and cloud developers.