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Open-source companies log impressive growth in Q2 2009

Open-source companies seem to be weathering the economic recession better than most, according to some recent reports from various private companies.

Matt Asay Contributing Writer
Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.
Matt Asay
3 min read

In May, I reported on the rising fortunes of Funambol, Mozilla, and other open-source companies. Signs of "green shoots" notwithstanding, the economy doesn't seem to be getting any better, but open-source companies continue to log impressive growth as open source pervades the enterprise, as Forrester analyst Jeffrey Hammond (@jhammond) recently noted.

Importantly, according to Hammond, while open source starts as a cost-saving exercise, it often morphs into something far more strategic:

[O]rganizations tend to start [with the goal of saving money with open source]. And then what tends to happen is the more that they become comfortable with using open source, and the more that they apply it successfully, the more they start to realize that there are benefits other than cost savings that they can take advantage of. And that's when you start to see them turn from open source opportunists into open source advocates.

Those "advocates" are funding the payrolls of a range of open-source companies. Here are just a few examples of those benefiting from this enterprise shift to open source:

  • The VAR Guy (@thevarguy) reports that both xTuple and Sopera are profitable. While he doesn't comment on how much they're doing in sales, profitability is, in itself, a significant achievement. (Alfresco, my company, is also profitable, and I'm sure there are others. Please let me know.)
  • Likewise, an open-source authentication and identity management company, announced that it is on track to record 100-percent sales growth in 2009. We'll call that a "pre-announcement."
  • MuleSource, an open-source Service Oriented Architecture (SOA) company, reported "another record for the company, with a 140 percent year-over-year increase in quarterly bookings and over 100 percent growth for the year-to-date period."
  • MindTouch
    MindTouch, not to be outdone, also issued a release highlighting its revenue growth (without giving any gee-whiz statistics but did us the favor of providing a pretty graph). More interesting, however, is MindTouch CEO Aaron Fulkerson's (@roebot) review of the various things the company has done right and wrong in commercializing its open-source collaboration project (Spoiler: favoring an enterprise build over a "community build" via stability and support is a bad idea).
  • Meanwhile, though not financial reports, it's encouraging to see Kuali adoption take off in earnest within higher education. "The colleges involved say they have the potential to achieve millions in savings while gaining more control over technology systems that are essential to the smooth functioning of their institutions." Nice.
  • Also, a member of the Perl community looks to Canonical's Ubuntu in search of a solid revenue model for Perl. Interesting read, though I'd probably look to foundations that have proved their financial mettle like Mozilla and Eclipse before I'd emulate Ubuntu, however much I may respect what Canonical is doing with Ubuntu.

Unfortunately, most open-source companies are private so the "earnings" reports are somewhat self-serving and mostly unverifiable. Still, it's good to hear of growth in the midst of a weak economic climate.

Disclosure: I am an adviser to MindTouch and MuleSource. I'll gladly report on other financial successes in the open-source world if you care to send them to me....

Follow me on Twitter @mjasay.