Microsoft’s GitHub is relying more on Azure, says cloud chief

Microsoft has been making its GitHub subsidiary more dependent on the company’s own Azure public cloud.

That lines up with Microsoft’s desire to increase the use of Azure, whose revenue was growing 40% in the second quarter, faster than any other major product category the company discloses every three months.

At the same time, it must be careful not to break commitments it made at the time of the $7.5 billion GitHub acquisition in 2018. Otherwise, some developers wary of Microsoft’s past behavior might not want to use GitHub to store their software code.

In the late 1990s, the U.S. Department of Justice argued that Microsoft had illegally required device makers to commit to including the Internet Explorer browser on every PC they shipped with the Windows 95 operating system. In the settlement of the landmark antitrust case, Microsoft agreed to a ban on pacts mandating exclusive support of its software, among other changes.

When GitHub was a standalone company, software developers saw it as a neutral ground where they could house their software projects and then run the code on the market-leading Amazon Web Services cloud or any other computing environment. Then Microsoft announced its plan to buy GitHub. Some developers objected, and over 1,900 people signed a petition to block the deal.

“Microsoft likely acquired GitHub so it could more closely integrate it with Microsoft Visual Studio Team Services (VSTS) and ultimately help drive compute usage for Azure,” Sid Sijbrandij, co-founder and CEO of GitHub competitor GitLab, was quoted as saying in a company blog post.

On the day Microsoft announced the GitHub deal, Microsoft published a blog post from its CEO, Satya Nadella, that communicated Microsoft’s intent.

“Going forward, GitHub will remain an open platform, which any developer can plug into and extend,” Nadella wrote. “Developers will continue to be able to use the programming languages, tools and operating systems of their choice for their projects — and will still be able to deploy their code on any cloud and any device.”

The company would also speed up the ability for developers at large companies to use Microsoft’s cloud infrastructure, Nadella wrote.

Some developers worried that Microsoft would adjust GitHub so that running code on Azure would be the easiest approach.

But Microsoft has employed more subtle tactics.

Instead of pushing developers to run their code on Azure, GitHub has simply introduced new products and features, many of which are built on Azure. So when developers use GitHub, Azure is increasingly the backbone.

For instance, GitHub Copilot, a tool that helps developers complete their coding projects line by line, uses Azure, said Scott Guthrie, Microsoft’s executive vice president for cloud and enterprise, in an interview with CNBC. The GitHub Actions service for building and deploying code and the Codespaces cloud-based development environment operate in Azure, too, Guthrie said.

“GitHub, historically, I could say, has run in their own data centers, not actually on a public cloud, and a lot of the new features of GitHub are using our public cloud,” Guthrie said.

That means the GitHub acquisition can increase Azure usage — even if customers don’t realize it — and Microsoft can say that GitHub continues to allow people to run their code on any server.

Under Nadella, Microsoft has transformed other companies it has bought into Azure users. In 2019 LinkedIn announced plans to move the business social network to Azure, and in 2020 Microsoft said Mojang Studios, publisher of the popular Minecraft video game, would stop using Amazon’s AWS.

“There is a lot of great stuff we’re doing, but at the same time, we’re being super careful, obviously, because you know, GitHub has a gestalt of its own, and so we’re making sure — and I think we’ve done a really good job of that — sort of being able to integrate all of those features in a very native way inside of GitHub,” Guthrie said.

In September Microsoft informed investors that its closely watched Azure and Other Cloud Services revenue growth number each quarter would expand to include “additional GitHub cloud revenue now delivered via our datacenter infrastructure.” Until now that revenue has fallen under the company’s Server Products category.

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