Microsoft CEO Satya Nadella says $7.5 billion GitHub deal shows, 'We are all in on open source'

  • Microsoft agreed to buy GitHub for $7.5 billion in stock.
  • Microsoft is in the midst of a cloud-first reorganization, which has sent the software giant in search of alternatives to court developers.

Microsoft CEO Satya Nadella says the company's $7.5 billion purchase of software developer platform GitHub shows, "We are all in on open source."

"Microsoft has heritage here. We were a developer tools company first and now, of course, we are all in on open source, and that's what really brings us together with GitHub," Nadella told CNBC's "Squawk Alley" on Monday. "We're going to operate it as an open platform for any language, any framework, any platform."

GitHub was valued at $2 billion in its last funding round in 2015, though it has yet to turn a profit.

Microsoft is in the midst of a cloud-first reorganization, which has sent the software giant in search of alternatives to court developers.

"[The] most important thing with a community asset like GitHub is to stay true to the core ethos of developer-first that GitHub has always had," Nadella said.

GitHub's tools have become essential to software developers, who use it to store code, keep track of updates and discuss issues. Nadella said that the "core ethos" of GitHub going forward will remain the same and that Microsoft will run it independently.

Microsoft Vice President Nat Friedman will assume the role of GitHub CEO, Microsoft said. He takes over for the developer platform's founder, Chris Wanstrath, who stepped down 10 months ago.

Andreessen Horowitz invested $100 million in GitHub six years ago. General partner Peter Levine championed Microsoft's pick to run the platform, noting that Friedman's reputation as a software developer demonstrates Microsoft's commitment to maintaining GitHub's open-source spirit.

"Nat Friedman will be a tremendous steward of this business. He is a developer-oriented person first," Levine told CNBC in an interview. "There are 800 GitHub people who have done a great job getting the company to this point. The Microsoft team will certainly be able to capitalize on that momentum."

It's an important choice, he said, considering GitHub's standing in the programming world.

"The develop ecosystem in an organization is front and center as every company in the world turns into a software company. GitHub catalyzed this," Levine said.

Microsoft has already integrated its Azure cloud services with GitHub, Nadella said, and will continue to integrate those services. He encouraged other cloud providers to integrate with open-source platforms, as well.

Microsoft, under Nadella, has embraced longtime rival technology Linux, the open-source software that ex-CEO Steve Ballmer once described as a "cancer."

— CNBC's Ari Levy and Alex Sherman contributed to this report.