Matt Asay writes today about the prospects for open source vendors going public or, more likely, being acquired, and wonders whether open source vendors should “hold out for an IPO” or “capitulate” and be acquired.

The latter seems far more likely, especially in the current economic climate. We have written before about the open source vendors most likely to go public in the next couple of years.

Looking at the list of contenders again it is easy to imagine that they could all be snapped up before they make it public thanks to the fact that 1) open source vendors are very attractive investments 2) it is difficult for open source vendors to build the momentum to do so.

I spoke recently with Bernard Dallé at Index Ventures, which has previously invested in the likes of MySQL and Trolltech.

Bernard made the point that while the open source distribution/subscription model is a great way of reaching potential new customers and generating predictable revenue, revenue is on average three times lower than a traditional licensing approach. The result is that it takes more time to build the momentum required to go public.

I previously wrote that for open source vendors patience is a virtue, noting that it took MySQL 12 years to grow to the a position where it was preparing to go public - and even it couldn’t avoid the lure of Sun’s lucre. The open source vendors that have followed MySQL’s example barely get the chance to build a meaningful revenue stream.

There is also the issue that the pure play open source vendors like Red Hat do not have the financial clout to compete with the likes of IBM and Sun and Oracle when it comes to potential acquisitions. You can read a little more about our view on that here.

In his take Matt writes that “I’m coming around to the idea that everything will be a blend of open source and proprietary software or services, at least for the foreseeable future.”

I can’t go in to too much detail but I’m doing some research on this right now and the fact is that the future is now. There is very little money being made out of open source software that doesn’t involve proprietary software and services.

Which is not to say that open source won’t survive and thrive, but if you’re waiting to see pure play open source vendors replace the current crop of industry giants you’re going to be waiting a long time.