Remember Trip Chowdhry, the analyst with Global Equities Research? He's. He said this a year ago, and Red Hat has delivered three solid quarters of growth and profitability since then.
Given how far off Chowdhry was then, it's perhaps no surprise that he's now claiming that "'almost every VC funded open-source company is struggling and will run out of funds within the next six months," as reported in Barrons.
To be fair, Chowdhry doesn't stop with open-source companies, and insists that virtually the entire technology ecosystem is doomed to die a quick and painful death.
On open-source companies, however, it would help if Chowdhry actually talked to some in developing his "research." Given how shockingly off-base his information is, I can't help but respond, complementing the data on SugarCRM and Openbravo that The VAR Guy already provided on this topic.
Yes, I know of some open-source companies that are struggling. But they are the anomalies. I sit on 10 advisory boards of open-source companies, work for one, and hear about many more. Alfresco is days away from profitability with over $12 million in the bank (most of our venture money), plus is en route to its 12th consecutive growth quarter. Pentaho and JasperSoft have millions in the bank and growing revenue. MindTouch and Loopfuse are pulling in record sales, with millions in the bank, etc., etc.
Which open-source companies did Chowdhry talk to, if any? Yes, there will always be weak companies, open source and otherwise, but when writing analysis that real investors are presumably supposed to rely upon, Chowdhry has a responsibility to do real due diligence, due diligence that would have dispelled the myth that he just attempted to create.