The open-source Gold Rush (Updated)

There's a lot of money to be made in open source, both as a shareholder and for the company.

Let's tally up the list:

  • Zimbra - $350 million (on $6 million of trailing revenues, on track to hit $20 million in 2007) - September 2007
  • XenSource - $500 million (on $1 million in trailing revenues) - August 2007
  • JBoss - $350 million (on $27 million in 2006 revenues) - June 2006
  • Sleepycat - $35-50 million (on ~$7 million in trailing revenues, is my best guess) - February 2006
  • Gluecode - $10 million (on very little in trailing revenues, less than $1 million, I believe) - May 2005
  • SUSE - $210 million (can't remember revenues - I think $30-40 million) - November 2003
  • Ximian - ~$50 million (I can't remember - on $1 million or so in trailing revenues) - August 2003

What's the trend? Bigger. We are in the midst of a Gold Rush, as Dana Blankenhorn has written. The rules of software business are being rewritten, and those who understand them will make a lot of money for shareholders...and themselves.

While the early days of open source saw a few wild valuations (Ximian comes to mind, though I still think it was a good move by Novell, as it brought open-source DNA to the company), it's only recently that we've seen open source break $100 million valuations on very little revenue.

Clearly, the market feels like the best is yet to come.

And so it is. Now is a fantastic time to be involved in redefining the software industry to one that focuses on customers, not licenses. You should join.

Updated with a more accurate picture of Zimbra's 2006 and 2007 revenues.

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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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