Alphabet Bets On GitLab Following Microsoft's GitHub Acquisition

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Even though Alphabet, Google’s parent company, has been using GitHub for the past few years, Microsoft’s purchase of GitHub has prompted the company to back GitLab instead. GitLab is GitHub’s largest competitor.

Alphabet's GitLab Investment

According to a Bloomberg report this week, GitLab recently obtained a $100 million investment from Alphabet's Google Ventures (GV), Iconiq Capital and Khosla Ventures, valuing the company at $1 billion. GitLab’s customers already include some big names, such as Intel, Alibaba and Nasdaq.

Alphabet backed the 350-employee-strong company after it lost a bid to acquire GitHub, the largest sharing and collaboration platform for software developers. Microsoft won that bid and was able to purchase GitHub for $7.5 billion in stock. Alphabet had invested $20 million in GitLab in a previous investment round in October 2017.

GitHub Acquisition, GitLab’s Gain

GitLab saw a large influx of new members on its platform after Microsoft acquired GitHub. Some developers and companies that have been using GitHub since before the Microsoft acquisition have argued that Microsoft has historically not played well with open source projects (such as GitHub and GitLab) and would therefore mishandle the platform.

The concerns may not be completely off-base as Microsoft hasn’t shown great stewardship for similar large acquisitions in the past, such as its $8.5 billion acquisition of Skype and the $7.6 billion acquisition of Nokia. Microsoft had to write-off the Nokia acquisition, and Skype has seen an increasing amount of criticism from users over the past few years, as the company has made moves like messing with the interface and adding advertisements.

“You sometimes see companies start out as open-source and then get alienated from their contributors. We work really hard to make sure that won’t happen," Sid Sijbrandij, GitLab CEO, told Bloomberg in this week's article.

Alphabet Projects on GitLab

A few years ago, Google started moving most of its projects to the open-source project-friendly GitHub platform, to make it easier not just for its own employees to collaborate, but also for external developers to contribute to Google’s open source projects.

Diane Greene, head of Google’s cloud arm, said in June that the company hopes Microsoft will keep GitHub neutral. However, Alphabet’s new investment in GitLab suggests Google has concerns.

It’s not clear yet if Alphabet will switch all of its projects from GitHub to GitLab. GitLab itself has already moved off Microsoft's Azure cloud platform and to Google Cloud, so more integration and collaboration between the two companies in the future is possible.