Comments on: Why buy an open source company?

By: 451 CAOS Theory » Asking the right questions of open source

451 CAOS Theory » Asking the right questions of open source — Wed, 27 Aug 2008 19:28:13 +0000

[...] may well be true, but we have only recently seen serious M&A activity involving open source vendors. That “handful” is [...]

By: 451 CAOS Theory » Nokia acquiring Trolltech

451 CAOS Theory » Nokia acquiring Trolltech — Mon, 09 Jun 2008 14:43:15 +0000

[...] acquiring Trolltech Matthew Aslett, January 28, 2008 @ 8:09 am ET Yet another open source acquisition. This time it is mobile device vendor Nokia stepping up to the plate with [...]

By: CRM Outsiders » Blog Archive » The Main reason for Open Source M&A?

Mon, 21 Jan 2008 17:11:45 +0000

[...] My old associates at the 451 Group put together a great report about open source M&A (ironically released a day before the Sun/MySQL deal was announced). For non clients a great summary is on the groups open source blog. [...]

By: Matthew Aslett

Matthew Aslett — Fri, 18 Jan 2008 15:16:08 +0000

Thanks Dennis. I think XenSource was a special case, for reasons discussed here http://blogs.the451group.com/opensource/2007/08/15/citrix-acquires-xensource/ so it doesn’t really make sense to compare the multiples, but you may well be right about the OSS infrastructure vendors

By: Dennis Byron

Dennis Byron — Fri, 18 Jan 2008 14:50:27 +0000

Matthew -

Good summary in the article especially the table that compares the different valuations.

What the comparison also says is that (1.) the Citrix/Xensource deal was an incredible outlier or (2.) the valuation of OSS pureplays and OSS pretend pureplays (those with an “Enterprise Edition” or some such device) is rapidly coming back to earth. Vs. the 500X you cite for Citrix (we think it’s more like 100X based on subseqent Citrix SEC filings but it was a hell of a lot no matter which estimte you use), Sun “only” paid somewhere between 13X and 20X MySQL’s 2007 revenues. To be fair to Citrix, it believes it paid about 10x 2008 revenue for Xensource. But of course we won’t know if that’s true for a year and Citrix won’t tell us if it was wrong anyways.

Bottom line: Alfresco, Compiere, Jaspersoft, and other OSS application providers are still in the IPO parade but the OSS infrastructure guys best get out of the line of march and find their “proprietary partners” as soon as possible.

Dennis