innovation

$1 Billion for Open-Source Firm MySQL

Open-source deals keep getting bigger.  Detect a trend?  I've been harping about open innovation and continued trend toward commercial open-source software.  Sun Microsystems today announced the acquisition of open-source database company MySQL for $1 billion.

The acquisition also represents a bid-up price for an open source company. The $1 billion Sun will pay almost equals the sum of the open source acquisitions that have preceded it. Red Hat paid $326 million for JBoss; Citrix (NSDQ: CTXS) paid $500 million for XenSource; Yahoo (NSDQ: YHOO) paid $350 million for Zimbra; Oracle (NSDQ: ORCL) paid an undisclosed amount for Sleepycat.

MySQL represents a small portion of the world's $15 billion in database revenue, perhaps $200 million a year, Yuhanna said in an interview. But it represents the database most frequently used for new Web applications, particularly those for the social engineering, active user-input types of sites, such as Facebook. Read >

Look for my next post titled "open-source and your corporate strategy."

Kameran Ahari

http://gotastrategy.typepad.com

What Do Google and Yahoo See In Start-ups Like Zimbra?

Does your initiative and strategy meet the key criterion for a successful IPO or acquisition?

 

My number one IPO / M&A start-up to watch in 2007 – Zimbra – was just acquired by Yahoo.  Another company on my watch list, GrandCentral, was acquired by Google in July.  Back in April, I listed my criterion for what it means to be truly innovative followed by my watch list.  Thus far, Google and Yahoo have shopped off this list.

To learn who else meets these criterion visit my April 16, 2007 posting "My Favorite List of Start-ups To Watch."

Does your business have what it takes to exit successfully?

Kameran Ahari

Unprofitable Tech IPOs With Smaller Market Caps on The Rise Again

Warning!!  Investors are chasing growth again.  So is this good or bad for tech?

According to an article in yesterday's Wall Street Journal titled "Tech Companies Bleeding Red Ink Pursue IPO Gold: Hungry Investors Accept Growth Instead of Profit" most of the tech firms in the pipeline for this year are in the red. 

March 13, 2007

. P A1

Some interesting data points from the WSJ 3/13 article:

"A number of unprofitable companies have launched initial public offering in U.S…since the beginning of 2006"

Back in 1999, 87% of tech IPOs had no profits.

"The proportion of unprofitable tech companies grew in 2006."

"Six of 13 tech IPOs in the fourth quarter" were unprofitable.

All three tech IPOs in Q1 of this year (07) are unprofitable.

62% of companies that have filed their S1 with the SEC for an IPO since 2005 are unprofitable (Thomson Financial).

This certainly cannot be healthy for companies and the innovators in this sector in the long run. Last thing we need is an industry that is perceived as being in one big contact cycle.  Looks like the investment community is gearing up to purge some of the backlog.