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Ballmer shopping for open-source companies. Who's for sale?

Microsoft will consider buying open source companies. Which ones should it take?

Sometimes I read things like this and I'm relieved to find out that Steve Ballmer isn't completely deluded by proprietary ideology. Speaking at the Web 2.0 Summit today, Ballmer made it clear that his vendetta against open source isn't as all-encompassing as he sometimes makes it out to be:

"We will do some buying of companies that are built around open-source products," Ballmer said during an onstage interview at the Web 2.0 Summit in San Francisco.

A refusal to consider acquisitions of open-source developers "would take us out of the acquisition market quite dramatically," Ballmer said -- a tacit acknowledgment of how thoroughly open-source development has reshaped the software market.

In other words, with the world moving to open source there wouldn't be much left to buy if Microsoft were to rule out open-source acquisitions. Especially since Oracle has already bought all of the proprietary companies. :-)

My, how the world has changed.

We need a bit more of this side of Ballmer: the rational side that recognizes that Microsoft needs to engage, not estrange, the open-source world if it wants to continue its success of the past three decades into the next three decades. The software world is changing - Microsoft must adapt to keep up.

I suspect Microsoft's first open-source acquisition won't be of a pure-play open-source vendor. Rather, it will necessarily be of a company that uses open-source as a tertiary yet still important aspect of its business.

Like Atlassian. Today Microsoft and Atlassian announced integration of Atlassian's excellent Confluence wiki with Sharepoint. Tomorrow perhaps they'd tie the knot permanently?

Atlassian would make sense because while it is not an open-source company, its ethos resembles that of an open-source project. It could be a Ximian-esque acquisition for Microsoft, bringing open-source DNA to the company must as Ximian did to Novell.

Other candidates? 37Signals. 37Signals would give Microsoft Basecamp: open source at its core, but SaaS in its implementation/value. It's a perfect story for Microsoft, and exceptional DNA for the company.

Or how about SugarCRM? SocialText (if that Atlassian acquisition falls through ;-)? Jive? OpenAds (this one would be truly game-changing and is actually a very good fit)?

Or Novell? The two companies already act like kissing cousins. But for the complications for Microsoft in overtly distributing Linux, this tie-up makes a lot of sense.

There are many good candidates, once Microsoft opens its mind to consider open-source acquisitions. Now it just needs to behave in such a way that open-source companies won't blanch at the thought of being acquired by Microsoft. Money isn't everything. Credibility matters a great deal, and open-source companies need to be able to look their communities in the eye with a straight face, without shame.

Comments like Ballmer's today set the right tone. I'm hoping for more like this.

By the way, for such acquisitions to work, Microsoft would have to give up its fetish for having its products work primarily with its other products. An Atlassian would need to support Linux, etc. It's no good to bring an open company into the Microsoft fold and then close it off. Red Hat has been learning the inverse lesson with JBoss. It's fine to guide preferred choices, but not to dictate them.