Red Hat’s acquisition-fueled climb to the cloud

Red Hat is famous for its ability to focus squarely on a market and technology and build success from there, as it did with Linux. However, the company increasingly has diverged from its roots and historical laser focus on the enterprise x86 server market with Red Hat Enterprise Linux.

The overarching theme and identity of Red Hat is still open source software, but the main driver for the company clearly is now cloud computing, which is intertwined with open source.

Read the full article at LinuxInsider.

Moblin as the middle man

Is it a phone, is it a PC? A netbook or MID? It’s Moblin and if Intel has its way, it will be ‘inside’ the mobile devices we’re using in a year or two, whatever they look like or whatever they’re called.

The latest page of this Intel Moblin story is the announced partnership with mobile phone giant Nokia. While details may have been scant in the announcement, it seems natural that Intel would want to work with a vendor on the mobile phone end of the spectrum, while Nokia would likewise want to stake its claim in the more PC-leaning netbook and MID end.

We’ve seen Intel and its Moblin community, now hosted by the Linux Foundation, work with other software vendors in various categories, primarily netbooks. Here we see Moblin being integrated and perhaps serving as a foundation for other Linux distributions, including Canonical’s Ubuntu Netbook Remix, Xandros, Linpus and Red Flag. These different distributions illustrate how in some ways mobile Linux continues to be somewhat fragmented. However, the distributions and their backers also highlight how the global opportunity and picture is much different and much greater than any than specific, geographic market.

Given all of the buzz around porting of Android to various hardware and processor platforms, I also wonder whether we will hear about similar collaboration and integration of Moblin with that Linux-based OS from Google and the Open Handset Alliance, of which Intel is a member. There is also Intel’s acquisition of Wind River, which represents its strongest push yet in embedded software.

I see all of this headed to a place where Moblin rests below a variety of other software that is more specialized to the particular device, whether it is a smartphone, a netbook a tablet PC or something else. The question is, will Moblin be able to play all of those different roles? Intel is intent on making sure the Moblin software and community have a whole cast of characters to make it happen.

CAOS Theory Podcast 2009.02.20

Topics for this podcast:

*Red Hat and Microsoft come together on virtualization
*New deals and models mean mobile Linux consolidation
*Sun shuffles its open source stack

iTunes or direct download (28:05, 6.6 MB)

Mobile Linux consolidation is for real

We’ve been talking on our blog and podcast about mobile Linux, and some of our findings from CAOS 10 – Mobility Matters. We’re seeing signs that we, along with mobile Linux and open source in general, are on the right track. It seems after a few fits and starts over the past few years, mobile Linux, consolidation and broader market share are all finally for real.

Here are a few developments that back up the contention:

*Esmertec buying Purple Labs to create Myriad Group AG: Esmertec, which is among software vendors in the Open Handset Alliance leveraging Android, is paying $82.4m in shares for Purple Labs, a mobile Linux, browser and messaging vendor. The combined company, Myriad, claims combined revenue in 2009 of around $125 million and represents 800 developers in America, Asia and Europe.

*A second major manufacturer and carrier (HTC and Vodafone) are bringing a second Android phone, the Magic, to market, highlighting the consolidation around Google’s Linux-based Android OS for the consumer space. We note in CAOS 10 how these first Android phones portend a positive future for the OS and open source on phones, and based on what we see today, that continues to be the case. We expect we’ll be seeing many more Android-based phones from major OEMs and carriers throughout the rest of 2009.

*There are also a number of new models coming out with LiMo, the mobile Linux consortium, software and specs on board. These include handsets from LG, Panasonic and Samsung. While LiMo is also looking to move beyond Asia and Europe and into the U.S., so is its opening competition from Nokia’s Symbian, which is in the process of being open sourced. Nokia and Qualcomm, which is also a backer of mobile Linux, plan on bringing Symbian phones to the U.S. We also discussed increasing competition among LiMo and Symbian in CAOS 10 and whether across the oceans or now in North America, this rivalry seems to be building.

These are all continued validation that the latest mobile efforts around Linux and open source software are truly contributing to consolidation, something the hardware, software and carrier players now pushing it have wanted for a long time.

Open source, VC and the long path

My CAOS colleague Matt Aslett wrote recently about how we expect to see an uptick in open source merger and acquisition activity given the current economic conditions and bargains for the larger, mostly proprietary players. Matt also discusses the difficulty of further VC funding, though we have seen some significant investment announcements, such as Open-Xchange, Infobright and others. Still, Matt is probably right that funding will be harder to come by for any company, open source or not.

I also continue to see a number of startup and younger open source vendors — would-be fundees — that are opting to hold off on venture funding and stick to building up business, customers and reputation. BitRock is chief among these vendors, which see some open source counterparts on the hook for tens of millions of investment, but with an exit path that has become overgrown with previous, strategic deals that valued open source as high as we have ever seen (e.g. Red Hat-JBoss, Citrix-XenSource, Sun-MySQL, Nokia-Trolltech). The fast path to acquisition is no longer as scenic or valuable, given valuations are now down to the floor. The option of the IPO is, well, not really an option right now. So companies such as BitRock, which was considering an A round earlier this year, are sticking to the angel-funded, bootstrapped startup route and a longer path to profitability and then, perhaps acquisition or going public.

Ohloh, the open source developer and project ranking and information company that provides a site for users and developers to communicate across open source projects, is another example. CEO Scott Collison reports the company, which is healthy, is now considering its best path forward, which may or may not include funding. Collison adds that he believes the only reason Ohloh can look ahead and consider an exit path is because it has been frugal and taken very little capital.

Another open source executive whose company is going ahead with further funding says the path, end game and funding boil down to the maturity and presence of the software, with established projects, communities and now vendors leveraging widespread use to present less risk to investors. The maturity matter is also something Matt discusses. I agree and think it is the newer companies still in the process of proving themselves and their products that are proceeding without funding, whether by choice or not.

Still, if doing without venture funding becomes more common for open source-based startups, it may limit the growth and revenue we see from open source. That, in turn, may make it even harder for those that do want or need VC investment to get it, particularly if they’re open source. Then again, it may just mean that while there is less investment funding to be had, there is also less investment funding sought, at least for now.