Their solution is to develop a virtual Git file system called GVFS - Git Virtual File System - a local copy of the Git repository and be virtualized, containing the data and source files that were previously used. Microsoft has adapted Git to handle this virtual file system. Then the client software will not try to retrieve the file that is not available on the local computer, and will also have a new file transfer protocol to select the file on the remote repository.
Internally, this has been proven successful when Windows development has switched to Git since May this year but what about the Git community?
Microsoft said that now half of the changes have been approved by Git developers, they are also willing to change to meet demand. But the most difficult thing is that Git is difficult to be compatible, repository requirements must be compatible on all versions.
GitHub's involvement is because they want to solve the needs of the business. Some industries have large repositories and problems when using Git, such as large game warehouses not by file or editing history but by graphics and other assets. Then what Microsoft is doing with Git will be very helpful. Microsoft also wants to switch to Git instead of TFS (Team Foundation Server).
Microsoft and GitHub also plan to bring up other platforms, first macOS, then Linux. The most obvious way is to use FUSE, a tool to build filesystems running on user mode instead of kernels (because that's easier and safer). They also know that FUSE is not fast enough - Dropbox with Infinite project is a lesson, so currently, uploading to macOS with Kauth (KAuth) mechanism is the best way.
See also: Did you know the 15 hottest programming languages on this GitHub?