Monday, September 17, 2007

Giving up on the billion dollars company?

Today, Zimbra has been bought by Yahoo! for $350M. No more than a month ago, I was celebrating the sale of XenSource for $500M, amazed by the multiplier but still questioning the future of OSS companies. In a nutshell: will any of our crop of open source commercial companies ever make it to IPO and become a billion dollar company?

I am very happy for Satish, Scott, Andy and the team. They are great minds, they have built a terrific product and they deserve a nice payback for it (and, yes, the multiplier is still crazy). Congratulations guys.

They were so good, I thought Zimbra was one of the few that could have made it all the way to IPO and after. They had a fantastic play and were on a great track. They could have been THE billion dollars open source company...

Looking at the market today and the multipliers flying around, I just do not see who can make it all the way. Open source is just too hot. Everybody wants a piece of it and building a community from scratch is plainly impossible (for starters, it takes five years...). There are too many buyers and too few opportunities out there... Scarcity is the name of the game. If you show up with a trunk full of gold, nobody will resist it. It is just part of human nature. And yes, VCs are part of the game too ;-)

My prediction is that prices will continue to go up, buyers will continue to buy and at the end of this madness, open source will simply be everywhere. But there won't be a billion dollars standalone open source company.

If we are all getting gobbled up by the mainstream, we will simply have to change it from the inside ;-)