August 12th, 2009
Will all the good open source companies be acquired?
Another one bites the dust.
Add SpringSource to the expanding list of independent open source companies that have been gobbled up by proprietary software giants.
Let’s consider the growing list: IBM’s purchase of Gluecode, Novell’s purchase of SUSE, Citrix’s XenSource deal, Nokia’s Trolltech buy, Sun’s purchase of MySQL, Oracle’s purchase of Sun (and hence MySQL and OpenOffice) and now VMware’s planned $420 million acquisition of SpringSource.
Is this what the founding open source developers envisioned?
Doubt it, but fewer open source backers are opposed to such mergers as the use of open source software expands in the corporate sector and mixed hybrid software stacks are growing up in the data center.
Open source is not toppling the ranks of proprietary software giants (yet) but the quiet revolution is taking place: the model of free and open software development has reduced vendor lock-in and is delivering enormous benefits to developers and customers, observers maintain. The acquisiton trend simply reflects this notion: industry titans can’t beat it so they’re joining open source, observers also maintain.
“I expect VMware will continue to invest and grow the platform and that bodes well for open source. I hope they realize that part of the value is the large number of people building on the platform for free,” said Larry Augustin, president and CEO of SugarCRM, a large open source CRM vendor. “VMware doesn’t have a long history in open source but this is a big bold step for them and I’m keeping my fingers crossed.”
“They did some contributions to the kernel and and made a free version of the hypervisor available but not in open source. This is their first big open source step and shows the value of these open source companies and platforms. ”
Some open source players question Oracle’s acquisiton of Sun but think the VMware-SpringSource marriage is a healthy one.
Open source is “a great production and distribution model, the latter being more important, that creates some truly enterprise-class products that customers need. For software developers this is especially true, since they want unfettered access to products to try them and understand how they work without needing to engage in a lot of commercial activity, which they find to be a distasteful time sink,” said Jeff Hartley, VP of Products and Marketing (correction) of Terracotta, which develops open source clustering software for Java and partners with both VMware and SpringSource.
“With our software, you can look at the code if you really want to know how it works, and you can suggest improvements or become a committer and help make future products. This point about distribution is perhaps just one reason why VMware and SpringSource make sense together, with Spring as an open source provider,” Hartley said. “As VMware builds its portfolio of products to make enterprise software easier to build and manage, it needs to connect up the stack with developers. SpringSource has certainly done a good job of that and is a big help in high regard in the developer community and have fantastic adoption.”
Once upon a time, corporate behemoths like Microsoft, Sun and VMware were considered the greedy proprietary vendors that open source startups would one day replace. Yes?
But that’s not panning out. Open source has gained credibility but the industry has yet to spawn another billion-dollar baby. So what shifted?
A realization that the open source business model may not be working as well as the open source development model? Or another aspect of open source’s bottom up success?
OpenBravo’s CTO recently said such deals are inevitable as proprietary giants infuse needed revenue into aspiring open source companies whose download count vastly exceeds their revenue.
Some think such marriages are ideal because they generate vendors with a healthy mix of proprietary and open source software. This prevents lockin while ensuring commercial provders enjoy a profit.
But will all successful open source companies end up in the clutches of proprietary software titans?
Have IBM, Novell, Sun, Citrix, Oracle and VMware thrown in the towel and see open source as the inevitable future? Or are they simply gobbling up the competition to protect their revenue streams for as long as possible, or making strategic buys to counter their rivals’ open source acquisitions?
I question this each time one of these deals are announced. Call me a cynic. But one has to wonder about the viability of the open source business model if all of the top open source dogs are acquired by traditional software vendors.
It’s understandable that venture capitalists who seed open source companies want to cash out but it would be nice to see another open source business succeed besides Red Hat.
I wonder how long it will take for Microsoft to make its first open source acquisition. Care to weigh in on the likely targets?
Paula Rooney is a Boston-based writer who has followed the tech industry for almost two decades. See her full profile and disclosure of her industry affiliations.
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