Over the last few years there has been a lot of fanfare around open source companies and their liquidation events. Most of the news has been around Sun’s billion dollar acquisition of MySQL or the Citrix acquisition of Xen and even Yahoo’s acquisition of Zimbra. In contrast there was little attention paid to the SourceFire. Actually if you ask most open source users about SourceFire they would probably answer “SourceWho?” If you ask open source users if they have heard of ClamAV or Snort they probably would be able to tell you that they are the leading open source software for virus protection and intrusion detection respectively. Recently, SourceFire has been in the news a bit lately as Barracuda Networks has made a bid for their open source competitor. Read the full story

Technorati Tags: ClamAV, Commerical, Community Leverage, MySQL, Open Source, Snort, SoureFire, Sun, Zimbra

Is 2008 going to be the Year of the Acquisition? Activity in 2007 was on the rise but now things seem to be at full speed.

• I remember when Alta Vista and Excite! were the hot search engines, my how the world has changed.  It looks like it’s narrowing down to a two horse race with Microsoft putting the moves on Yahoo! for about $44.6 billion (Notes from SearchEngineLand). I guess it’s really on now, Google versus Microsoft in a search engine death match.
• Yahoo! acquired Zimbra last year. I wonder what that means for the "Exchange killer"?
• Amazon is acquiring Audible.com the leading provider of digital spoken word content establishing itself even further as the web’s biggest superstore.
• There were already three open source transactions in January:
• MySQL bought by Sun
• Nokia Buys Trolltech
• Covalent was Acquired by SpringSource
• In preparation Andrew Aiken and the boys from the Olliance Group are ready to help along the deals with their newly formed M&A practice. 

The question now is,"Who’s next and how much?"

Technorati Tags: , acquisition, amazon, Audible, Google, Mergers, Microsoft, MySQL, Nokia, Olliance, Sun, Trolltech, Yahoo!, Zimbra

And on goes my fascination with open source companies and their valuations…

I was reading Stephen O’Grady’s commentary on open source companies and their valuations prompted by the recent acquisition of MySQL by Sun for $1 billion. He quotes Jeff Gould who logically questions whether Sun can make the acquisition pay-off.

Stephen also quotes a piece from Knowledge@Wharton on the myth of market share.

It is a common practice of many companies to focus their attention on grabbing market share from their competitors. But such efforts can actually be detrimental to the firm’s profitability, according to Wharton marketing professor J. Scott Armstrong.

[From The 'Myth of Market Share': Can Focusing Too Much on the Competition Harm Profitability? - Knowledge@Wharton]

Another logical and thoughtful piece by much smarter people than I. Part of their support was came from analyzing companies that operating in a pre-Internet market. These companies didn’t benefit from the ability to market and distribute their products over the Internet: GE, Dupont, Union Carbide, and Alcoa. They didn’t have digital products an open source licensing and blocking strategy either. The end result of profitability is still valid but I believe the route to profitability may be different for open source companies.  

Read the full story

Technorati Tags: Competition, Downloads, MySQL, opensource, Oracle, Profitability, Red Hat, Valuations

Raven Zachary, Research Director at the 451 Group along with Brenon Daly, just released a brief on open source mergers and acquisitions, "Open Source Q&A comes of Age". 

Their summary indicates a considerable growth trend:

After several years of mostly one-off deals, open source deal flow took off in 2007, setting a new record for M&A in the sector. We tallied 30 open source transactions in 2007 – twice the number in 2005 and up substantially from the single-digit number of transactions in the early2000s.

Read the full story

Technorati Tags: 451 Group, Acquistitions, Citrix, EnterpriseDB, Mergers, MySQL, Open Source, Oracle, Raven Zachary, Red Hat, Sun, Xensource

Simon says,"Sun’s buying MySQL for just shy of $1 billion." I guess all bets are off on the IPO. That gives Sun the full stack OS to apps now and puts them on par with Oracle at least for telling that story. That leads me to speculate with Oracle telling the same story, "Does Red Hat try the same thing by snapping up PostgresSQL vendor EnterpriseDB to give themselves the RHEL, JBoss, and database full monty?"

Big news for enterprise open source, another successful open source software exit.  

Technorati Tags: acquisitions, EnterpriseDB, MySQL, Oracle, PostresSQL, Red Hat, Sun