I think the main reason is to have a better offer from a single vendor from a single provider. VSTS is an ugly monster, and the workflow in GitHub is well-known. It makes sense... the other factor is the way they can 'steer' new deployments to Azure seamlessly. if there are tools that will help you deploy from your GitHub to Azure without any hassle many developers will start deploying to Azure, giving them an edge in a clear strategic product for M$.
As for competing products, I can only hope for them to get better. VSCode was built with Electron, I see no reason for m$ to kill something like that, and PRecisely I was listening HanselMinutes, and I heard many complaints about the Hithib integrations to BaseCamp. It makes sense to get something like MSTeams to improve on that front.
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