The next $1 billion open source acquisition? Give it 12-18 months

Open-source companies will increasingly top $1 billion in valuation.

Michael Tiemann's Cygnus Solutions held the open-source valuation record for nearly a decade at $674 million. A few weeks back, Sun broke that record by paying $1 billion for MySQL. So how long does Michael think MySQL will hold the record?

Not very long.

...I would not be surprised to see another $1B deal of some sort in the next 12-18 months. The reason is simple economics:

open source beats proprietary software as a development platform and as a value-delivery platform, and given how many millions of dollars companies are seeing wasted on proprietary software, it's only a matter of time before the majority of software technology deals are denominated in open source.

I advise 10 open-source companies and see amazing growth rates. Most open-source companies are starting from small numbers but several of these (counting companies I advise and some that I don't advise) will top $100 million in sales within the next five years. Some get there within the next two or three years.

At those sales figures, $1 billion may become the new norm for open-source valuations. The real question will be whether any will stick it out long enough to hit $1 billion in sales, and not just valuation.

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