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Apache makes its first $420 million

The Apache license just got its first big validation as a critical business tool for start-ups, not just software behemoths.


Others and I have made much of VMware's acquisition of SpringSource for $420 million, but one crucial point has been overlooked: this is the first big acquisition of a company that depends on the Apache license.

Yes, we've seen smaller acquisitions of open-source companies that rely on Apache-style licensing. IBM acquired Gluecode (Geronimo project), SpringSource bought Covalent (Tomcat), Oracle acquired Sleepycat (Sleepycat, BSD license), and there have likely been others that I'm simply not remembering.

But the big, head-turning deals? GNU General Public License (GPL). Every one of them.

Nearly every other big open-source acquisition, from JBoss ($350 million) to MySQL ($1 billion) to XenSource ($500 million), has involved the GPL. Even Zimbra ($350 million), while not GPL, fits the mold because it used an attribution clause with an MPL license that was designed to accomplish GPL-esque ambitions.

The GPL has been prominent for good reason. It's accepted wisdom in the commercial open-source crowd that it's difficult to directly monetize Apache-licensed software, and that the GPL, what with its capitalist urge for control, is a better tool for the financially inclined.

The SpringSource acquisition turns this "wisdom" on its head.

Perhaps this is because our notion of "monetizing open source" has expanded, as Eric Barroca astutely argues. The GPL is great for dual-licensing and support-based businesses, but it's not very adept at incorporating proprietary software in the way that IBM does, for example, or Day Software, as Kevin Cochrane notes.

In other words, we're getting beyond open source as a religious coda, the secret handshake that makes one part of The Club, and instead are focused on building businesses that provide greater transparency and value for customers. I suspect we'll therefore see more Apache and less GPL going forward, with companies contributing significant parts of their product/business to open source, while delivering the rest via proprietary licensing.

IBM already does this. So, frankly, does Microsoft (though still to a small degree). I think we'll see a lot more.

The reason is that customers have never been as religious about open source as the vendors/communities that develop it, a lesson I was taught by a crowd of CTOs in New York and which is highlighted in a recent Enterprise Systems Journal article.

But it's also a function of open source's growing importance in the software ecosystem. As more money pours into open source--IDC projects $8.1 billion in open-source revenues by 2013--there will be increasing pressure to make it pay, as InfoWorld recently wrote:

As the open source market continues marching away from its roots--the lone developer who creates a useful product as a labor of love--appreciation for the idealism that lies at the GPL's heart is diminishing. Businesses that view open source development as a path to a profitable future rather than as an altruistic mission are increasingly balking at what they view as the license's excessively restrictive aspects concerning code improvements.

Such thinking, among other considerations, led Appcelerator to drop the GPL for Apache, and I believe we'll see more. We just had a significant demonstration that you can make money with Apache-licensed software. SpringSource was doubling sales every year with Apache, and had a $420 million outcome as a result of both its sales and its community, which may be easier to come by with an Apache license than GPL, at least for commercial open-source projects.

It's telling, for example, that InfoWorld's attempts to interview Richard Stallman, founder of the GPL, were stymied by his "demand(ing) control of what (InfoWorld) published." You don't grow a community with that emphasis on control of the outcome.

IBM proved long ago that it's possible to build billion-dollar businesses with Apache. But SpringSource is the first start-up to suggest that Apache isn't simply a way for big companies to create complements to proprietary cores. Sometimes an Apache core is worth something, too. At least $420 million, by SpringSource's reckoning.

Follow me on Twitter @mjasay.

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