Brave new world opens up for Microsoft

Under the leadership of Satya Nadella, Microsoft looks like a very different organisation from the one his predecessor, Steve Ballmer, attempted to build. Ballmer infamously jumped up and down on stage at a Microsoft developer conference, proclaiming: “I love developers.” Outwardly, it looked like his strategy built on the strong Microsoft ecosystem pioneered by founders Bill Gates and Paul Allen, to spread Windows everywhere.
It is highly unlikely that Nadella will ever jump up and down on stage for anything. Instead, under his leadership, Microsoft is currently the largest contributor on GitHub and last week announced its $7.6bn acquisition of the open source repository.
Arguably, open source is not an alternative to commercial software. Rather, it is a way to create software collaboratively, and at a global scale. Active contributors in the open source community resolve problems; the source code is visible and can be tweaked and updated by anyone.
Analyst Gartner believes Microsoft’s acquisition of GitHub gives it a way to target 17 to 30-year-old developers, who code primarily using open source tools and build cloud-native software. That is why Microsoft acquired Xamarin in 2016, bringing an open source version of .Net, and is why its Visual Studio is available on Linux.
If it is to succeed in offering a viable platform in the Azure cloud, Microsoft needs to make Azure the best platform for open source. The value-added services it then offers on top of Azure, such as for machine learning, artificial intelligence, the internet of things and graph databases, are the bait to entice developers to write code built using its public cloud.
Yet for every open source project Microsoft puts on GitHub, there are likely to be alternatives that developers can use, code submitted by the likes of Amazon Web Services, Facebook and Google to startups and individual developers’ work. This gives open source developers a choice, a choice that was not so easy in the Windows-only world of the old Microsoft.
Nadella now has a chance to do something truly remarkable. After the initial licence purchase, Windows is already being distributed as a free operating system update. The next step is to make it free and rely on enterprise support contracts for revenue. And finally, Nadella should use the acquisition of GitHub to pave the way to making its core operating system fully open source.