Will Cisco be the great open-source consolidator?

Cisco Systems has the chance to consolidate open-source vendors and take advantage of its own economics of scale.

Cisco Systems has always been a highly aggressive acquisition machine, and today's announcement that the company has acquired Jabber makes sense in light of the push toward enterprise collaboration that started with the acquisition of WebEx.

While Cisco made no mention of the fact that Jabber was largely open source, I would assume that's because open source is "accepted" at Cisco. A number of products contain open-source components, and despite some GPL issues in the past, Cisco has contributed to open-source projects.

So, is Cisco the company to consolidate open source, or to just consolidate software in general? I would be willing to wager yes, provided it can generate even slightly more revenue from the assets it acquires.

Typically, Cisco looks for acquisitions that would bring in $300 million or more of revenue (anything less isn't very material to the bottom line) and open-source companies are nowhere near that. However, with Cisco's massive brand power and ability to put pretty much anything into a box, they could easily monetize all kinds of open-source projects.

Several of the leading open-source companies fit right into the Cisco business: Hyperic (systems management, including virtualization), Funambol (mobile) and don't forget the world of SOA and system infrastructure, including XML acceleration.

Minus a few product like databases and CRM there are few open-source products that Cisco couldn't make money from. At the moment there isn't much appetite for open-source acquisitions at the obvious places (Sun, Red Hat, IBM, Oracle). Maybe Cisco will jump ahead of the traditional software players and consolidate the open-source ecosystem.

 

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