The top IPOs in 2008? Most will be open source, says Fortune

Open source is going public. It's about time.

I found Fortune's article on the top IPOs to watch for in 2008 to be fascinating, but Matthew Aslett's analysis even better. The shocking thing in Fortune's article is that open source or open-source related companies account for four of the five listed.

It's nothing less than shocking.

It means that for all the bluster of open source being inimical to profit, the inverse is true. Giving one's product away to achieve abundance/ubiquity turns out to be a winning business model. For example, my Alfresco sales team is now routinely closing six-figure deals...over email and the phone...with less than five years of sales experience (and often much less). The seven-figure deals still often require a visit. But the cost of sale is still anemic compared to the proprietary world.

You can't do that with proprietary software because you have to employ people that have many years of experience in convincing a customer that Product X can walk on water...when in fact it can hardly swim. MySQL sells into an ocean of adoption. That's much, much better than selling into a desert of actual experience with one's product.

Open source shifts value to the actual service delivered, rather than the license that provides no value in and of itself. I don't think 2008 promises to do anything more than set off a long-term financial return in the public markets with open source. It will end the alleged endogamy that keeps open-source companies fraternizing with themselves while the rest of the world rushes by.

In other words, it's easy to discount open source as a financially viable strategy when Red Hat is really the lone independent open-source company. But with MySQL, Ingres, etc. added to the list, it becomes harder to discount open source with a straight face.


UPDATE: In thinking it through a bit more, I'm hopeful that the IPOs go better than they have. I doubt that Sourcefire's lackluster performance on the public markets is doing open source any favors. We need MySQL and others to have a clear path to increasing quarters to help lift the entire open source industry.

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About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

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