Microsoft struggle to escape the past

Microsoft struggle to escape the past

Microsoft’s latest acquisition shows that they’ve changed significantly in the past decade. The backlash against it exposes the limitations of consumer perceptions.

On Monday, a leading maker of software for developers announced they were acquiring the world’s largest service for hosting and managing source code. The internet exploded in outrage. Large numbers of developers proclaimed that the acquisition was a plot to destroy open source software, and that the new owners were trying to kill their acquisition. Many migrated their projects to competing code hosting services.

I am referring to the news that Microsoft is purchase GitHub for $7.5 billion. The strategic logic for the deal is strong. Microsoft were founded as a developer of technologies for other developers. This continues to be an important business for them. Their Visual Studio product is widely used across businesses of all sizes, even when using non Microsoft development languages and frameworks. The latest versions of Visual Studio have GitHub integration built in, providing an end to end toolchain for software developers.

GitHub is also widely used by businesses of all sizes. It is the first place developers of all types consider when deciding where to host their code. This includes Microsoft, who are now GitHub’s largest customer. Last year, they killed their competing TFS product and moved the source code of all their software to GitHub. In doing this, they discovered that the technology behind GitHub didn’t scale to the requirements needed to develop Windows or Office. To fix this, they worked with GitHub to extend the underlying git platform that powers the service to scale to even the largest software project. This will allow other enterprises with similarly complex requirements to adopt GitHub for all their development projects. Most importantly it provides a path for the hugely unprofitable GitHub to stop bleeding red ink and make money.

Past Reputation

The backlash against the deal comes from the fact that GitHub is a lynchpin of the open source software community. The source code for the majority open source projects are hosted on it, and the company has been a champion of open source development methodologies from the very beginning. GitHub was designed first and foremost to be used for open source. Allowing non-open source projects onto GitHub was intended originally as a means to make money. All code on GitHub is visible to everyone by default. Developers have to pay to keep their source code private.

On the other hand, Microsoft spent the late 90s and early 2000s trying to kill open source software and the movement behind it. In 2001 their CEO, Steve Ballmer, famously described Linux, the poster child of open source, as a cancer.

Their attitude to open source had since changed dramatically. Microsoft have in recent years open sourced a number of their development platforms including the .net development language and the PowerShell scripting language for IT admins. They now host thousands of Linux servers on Azure. In 2017, they even released a Linux version of SQL Server, one of their core products.

Legacy Costs

It appears that not everyone has noticed this change. On tech sites every news story about Microsoft is accompanied by comments recounting the sins of the past. To this minority, every piece of positive news is forgotten or explained away. Microsoft have rebranded but, many developers remember the old hegemonic behemoth of the past and still hold a grudge. The new open collaborative company has escaped their notice. When Microsoft say they have new values and a different culture not everyone believes them. People remember mistakes.

This is a problem familiar to many social media users. It is impossible to escape that offensive post or embarrassing photo. Just ask politicians. Journalists regularly trawl through Twitter histories and Blog archives from years gone by looking for the latest scandal, then publicise them to get clicks or sell newspapers. Brands are treated no differently.

Key Metrics

Yet, Microsoft are one of the most successful companies on the planet. They have adapted to the cloud revolution far more successfully than many of their competitors. Every new product launch is welcomed by far more people than criticise it. References to the new Microsoft and praise for CEO Satya Nadella abound on tech blogs. The critics are a vocal minority, but one with little impact on the bottom line. Microsoft have accepted that they’re never going away.

You can’t please everyone. Nor do companies have to. Marketers only need to delight their customers and prospects. Microsoft have an expanding number of both so the critics don’t matter. In the end, it’s only the numbers that truly count.

Written by
Marketing Operations Consultant and Solutions Architect at CRMT Digital specialising in marketing technology architecture. Advisor on marketing effectiveness and martech optimisation.