Matt Aslett has a new home at The 451 Group and is getting busy. He just posted his Q3 update on open-source venture capital investments, and the news appears to be bad: a 41percent decline in investment.
But is the news all bad? Not according to Matt:
The news is not all bad however, as there are indications that the downward trend is cyclical, rather than spiral. The level of investment via seed and Series A funding rounds actually increased for the second quarter in succession, while the big money for established vendors went on M&A activity rather than venture funding.
Balanced against this potential negative news is an earlier Dana Blankenhorn report that open-source investing is actually heating up:
Ann Winblad, a partner in the prominent San Francisco VC that funded MuleSource, said at MIT's Emerging Technologies Conference Thursday that the money will keep flowing as open-source software penetrates deeper into the IT infrastructure, beyond the operating system, application, and database layers...
"The opportunity distilled here is that core pieces of the infrastructure are becoming open source," Winblad said. "The opportunities are almost everywhere where software is not matching the current architecture. If it isn't open, isn't supported by an open community of innovators, there's an opportunity for an open source company."
We are the beginning of open source's dominance, not the end. Venture money is starting to pay off in the form of acquisitions at great valuations. VCs are not stupid. They know how to follow the money. There's lots to be made in open source.