List of Notable Open Source M&As

Open-source Mergers & Acquisitions Up 50%

 

According to a recently published report by The 451 Group , 2007 was a record year for open-source M&As and valuations. According to the report, the number of open-source mergers and acquisitions jumped from 15 in 2005 to 30 in 2007. The XenSource, Zimbra, and MySQL valuations were off the chart. Citrix Systems paid XenSource 500 times annual sales.

 

Rather than republish the excellent 451 Group post, I compiled a more complete list with disclosed valuations. If the acquired company's URL does not exist, more than likely the acquisition was tactical. Some pundits argue most open-source acquisitions are tactical strategies. I Googled each deal to find a valuation.  A number of these deals are undisclosed.

                                                                                                                                                                                                                                                                                                                                                         

	Company	Date	Acquired Open-source ISV	Deal	Multiple of Annual Revenues
1.	Novell	Feb. 2008	SiteScape	undisclosed	$3.5 m. / Yr.
2.	SpringSource	Jan. 2008	Covalent
3.	Nokia	Jan. 2008	Trolltech	$153 million	4 X
4.	Sun Microsystems	Jan. 2008	MySQL	$1 billion	15 – 20 X
5.	Citrix Systems	Oct. 2007	XenSource	$500 million	500 X
6.	Ingres	Oct. 2007	Luminary Solutions
7.	Ingres	Oct. 2007	Management Information Systems
8.	Yahoo	Sep. 2007	Zimbra	$350 million	70 X
9.	Wind River	Sep. 2007	Comsys	$1.4 million
10.	Digium	Sep. 2007	Switchvox
11.	Univa UD	Sep. 2007	United Devices	merger
12.	ActiveGrid	Sep. 2007	TurboAjax Group
13.	Sun Microsystems	Sep. 2007	Cluster File Systems
14.	Sourcefire	Aug. 2007	ClamAV	$2 - $3 million
15.	Xandros	Jul. 2007	Scalix
16.	CollabNet	Apr. 2007	SourceForge Enterprise
17.	Red Hat	Apr. 2007	MetaMatrix
18.	IONA	Apr. 2007	LogicBlaze
19.	Pentaho	Sep. 2006	Weka Project	undisclosed
20.	Red Hat	Apr. 2006	JBoss	$350 - $400 million range	120 – 145X
21.	Oracle	Feb. 2006	Sleepycat	$10 - $50 million unconfirmed
22.	Oracle	Oct. 2005	Innobase	$3 million
23.	IBM	May 2005	GlueCode Software	$50 million <   undisclosed
24.	Novell	Nov. 2003	SUSE Linux	$210 million	7X
25.	Novell	Aug. 2003	Ximian	$40 million
26.	Red Hat	Nov. 1999	Cygnus Solutions	$675 million

Clearly some of these open-source organizations are a direct threat to the status quo licensed business model.  There is no question that some of these valuations reflect the supply and demand dynamics for more efficient and flexible open-source solutions. The average number of open-source applications sited in the enterprise jumped 26% in 2007.

 

Expect this pattern to hold as the software industry continues to consolidate and the adoption of open-source in the enterprise continues to rise. Look for new opportunities associated with implementation, integration, certification, testing, and support for these applications.

 

Related Sources / Stories

Open Source M&A Come of Age
http://www.the451group.com/report_view/report_view.php?entity_id=51385&dealbook=refer

 

OpenLogic Recaps 2007 Open Source
http://www.reuters.com/article/pressRelease/idUS126599+22-Jan-2008+MW20080122

 

Is The Open Source IPO a Pipe Dream?
http://blogs.zdnet.com/open-source/?p=1947

 

Here Come The Hot IPOs of '08
http://money.cnn.com/2008/01/10/markets/ipo/copeland_ipowatch.fortune/?postversion=2008011012

 

Open Source IPOs – Take Two
http://blogs.the451group.com/opensource/2008/01/23/open-source-ipos-take-two/ 

 

The Worth of Open Source? Open Question
http://www.businessweek.com/technology/content/jun2007/tc20070625_775467.htm

 

 

Kameran Ahari
http://www.gotastrategy.typepad.com