New open source venture funding and the importance of SAP Ventures and Intel Capital

SAP and Intel clearly believe there's gold in them there open source hills. Shouldn't you?

I suppose the big news for me today, as an Alfresco employee, should be that we just closed a $9 million Series C round with SAP Ventures leading the round. But since we didn't need the money (not even remotely) and I didn't want the dilution, it's not my favorite news of the day. Let's just say that companies don't always raise money for the money.

I was actually much more intrigued to see Zenoss add $11 million in Series B funding. Or Intel Capital's Series A investment in REvolution Computing, which provides an open-source statistical tool with commercial support and leverages parallelism.

Perhaps the big story out of the Alfresco and REvolution investments is the activity of Intel and SAP in financing open-source companies.

Intel Capital has funded Red Hat, SuSE Linux, JBoss, MySQL, Zend Technologies, Fonality, CollabNet, and Black Duck. SAP Ventures? Black Duck, JasperSoft, Intalio, Groundwork, MySQL, Ping Identity, SocialText, Zend, Red Hat, and Sistina. These two companies have funded a large swath of open source's top companies. Not all by any stretch, but many.

So here's Intel, which apparently owes its existence to Microsoft, and SAP has gone on the record over and over in downplaying open source's significance, both funding the open-source revolution. Money speaks more loudly than words do. SAP and Intel clearly think there's something to this open-source thing, even if one accepts the argument that financial investments are separate from their strategic product directions.

SAP and Intel invest to make money, right?

Not always. Both companies use their venture arms to place strategic bets. If I'm an industry observer, it's evident that both companies are placing big bets on open source. What does this mean you should be investing in?

Exactly.

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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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