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Will we see an open-source IPO in 2010?

The IPO market may be set to boom, but its appetite for open-source IPOs won't really ignite until the companies cross $100 million in sales.

2010 is promising to be a big year for technology IPOs, but will open source join the party? Probably not. Not yet, anyway.

Noted finance blogger Paul Kedrosky speculates that "it may start with Twitter, or Facebook, or Zynga (or even Yelp), but an IPO wave is coming and all it requires is a Netscape moment."

While I (along with Tom Foremski) believe there's more IPO smoke than fire, it does feel like we're due for a big year of technology IPOs. "Big" as in "more than the last few years."

I guess that would require just one. Or so.

But what about open source? It seems clear to me that we're entering a phase in commercial open source when the best businesses will grow, rather than explode into $300 million to $400 million acquisitions. (Yes, I'm weeping as I write this.)

Ingres CEO Roger Burkhardt disagrees. As he writes in Dr. Dobb's Journal, 2010 should see the IPO of a non-Linux open-source company:

The growth rates of certain open source companies has been impressive (50%+). We also believe a few have crossed the Wall Street friendly $50 million in run rate Billings barrier. The investment community is itching for new ideas and open source has been a theme (along with cloud computing) that resonates well with investors due to its highly visible model. The open source Enterprise Content Management (ECM) space has been hot and we would not be surprised to see an IPO candidate emerge from that area in 2010.

I don't think so. I don't believe we'll see an open source IPO until a company crosses the $100 million threshold, and we're simply not there yet. Growth rates are great. SugarCRM, a company I advise, is promising 100 percent growth in 2010. But profitability and long-term proof of company viability, as measured by revenue, is what will sell to institutional investors.

Hence, I can't see a still-skittish Wall Street buying into an open-source IPO in the absence of the psychologically pleasing $100 million revenue figure.

Once we get an open-source company in that frame, I think we'll see a real boom of open-source IPOs. With the cost of IT project failure estimated at $6.2 billion, and open source serving up a great remedy, the conditions are right for the market to embrace open source.

Once that embrace translates into $100 million in revenue, we'll see Wall Street embrace open source again, too.