Ask HN: What could be the business model of VS Code?

I don't think they need to... VS Code is somewhat "open source", which means that part of the development is subsidized to the community, and they have other source of profit that allows them to maintain its development.

[I can be wrong :) ...]

So MS dev tools (VS studio) were under attack (aka the innovator dilemma) from below by jet brain. The goal of VScode is to disrupt jetbrain from below. This was the correct response to the innovator dilemma, which is really hard to poll off in big org.

The ultimate goal of MS is windows/office usage. Today you can add Azure. MS has a very captive (and somewhat silence) enterprise developer audience which must be protected at all cost (mostly .Net / C# programmers).

However, once Linux attacked windows NT as well as general attack by cloud computing (AWS) which uses Linux, MS needed to create general dev tools which are not NT centric and would assure control on developers even in the area where Linux dominate.

Also note that MS suffered (and still suffering) from the mobile OS failure. This traumatic experience only increase the need to control on developers in the cloud/enterprise.

Software used to be all closed-source and sold in shrink-wrapped boxes. It was a more honest time. The internet destroyed all that, and new schoolers like Netscape and Yahoo pioneered the portal strategy -- have the world come through your door, and good things will happen (advertising revenue mostly). While vscode does not thus far post ads, the motive is the same: foot traffic.

Microsoft has always been focused on developer experience (if you haven’t seen Steve Ballmer’s “Developer Developers Developers” video, it’s a must). VS Code is a result of one of the drastic changes Microsoft went through in the last years. It is open source and extensible to get more developers to like Microsoft’s ecosystem, which translates eventually to revenue on Azure.