November 5th, 2008
Open source valuations remain birdseed
Pingdom, a Web site monitoring outfit, did a piece on open source corporate valuations on its blog recent and they make sobering reading.
You’ll never be Bill Gates working in open source.
The valuations offered are, frankly, birdseed. Mozilla brought in under $67 million, 85% from Google. Canonical, the sponsor of Ubuntu, still isn’t profitable. SUSE Linux may book $110 million in revenue this year, Red Hat about $600 million.
If these were taco stands this would be serious dosh. But these are the leaders in what is becoming the dominant end of the software market.
Of course sometimes the bottom line is not the bottom line. Judging the success of open source merely through vendor revenue numbers is very short-sighted.
Much of the value in open source is money that customers aren’t spending, value which is plowed into other businesses, far beyond software.
The nature of asset value is also different. The code is the chief asset of open source, while in the proprietary world it’s generally goodwill.
And that code, as we’ve seen, is immensely valuable. But who holds that value? No one person or company does. Everyone does.
This is why proprietary critics continue hammering on open source as a loser. The criticism is valid, but short-sighted and irrelevant.
Your bottom line is not the only bottom line. Mine counts for something, too.
Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983. You can follow Dana on Twitter. See his full profile and disclosure of his industry affiliations.
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| 11/05/08
