Microsoft shares were up almost 1 percent at a record high of $101.78.
Microsoft executives pledged Monday that GitHub would remain open to all developers, and engineers who used it would be able to upload any code and export it to any cloud platform, not just to Microsoft's.
Yet while Microsoft's stance toward open source has changed over the last few years, many open source developers will keep a very close look at what the company will do with GitHub after the acquisition . Developers love GitHub, and Microsoft needs the love of developers.
Why this matters: Microsoft says it's been the most active organization on GitHub, and that it wants it to operate independently.
GitHub, founded in 2008, is a platform where software developers can go to host and review each other's code. This deal will mark another dramatic step in that direction.
He said Microsoft will use GitHub to promote company's own developer tools and use its sales team to speed up adoption of GitHub by its big business customers.
GitHub serves as a code repository and also offers developers a place to learn, develop, collaborate on and document their code. Still, GitHub's losses have been significant - it lost $66m over three quarters in 2016 - and it has been hunting for a new CEO for nine months. Microsoft's CEO, Steve Ballmer, has even been quoted calling Linux a "cancer" in the past. The site stores valuable code for thousands of developers and companies, and also can track major trends in the software industry.
Github, on the other hand, claims to now support a community of more than 27 million people who share and work together to build software.
One person familiar with the discussions between the companies told CNBC that they had been considering a joint marketing partnership valued around $35 million, and that those discussions had progressed to a possible investment or outright acquisition. This isn't a completely unexpected move from Microsoft as Business Insider reported only last week that Microsoft was eyeing up the $2 billion company.
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