SpringSource

VMware, Salesforce.com to offer in-cloud Java

Two relatively new arrivals in the computing industry announced a partnership to profit from the trend toward general-purpose cloud computing services on the Net.

The first partner is VMware, an EMC subsidiary that specializes in virtualization technology that lets multiple operating systems run simultaneously on the same computer for greater operational flexibility. The second is Salesforce.com, a company that offers its clients customer-relationship management services online. Under the partnership, the two will offer a cloud-based service called VMforce for running Java applications.

Specifically, VMforce will permit programs written with VMware's SpringSource tools and technology to run on tc … Read more

Open-source acquisitions: What's the holdup?

Trying to figure out a company's acquisition strategy is often complex. Some companies have very purposeful approaches to scoping out companies, products, and market segments, while others' approaches are much more scattershot.

Acquisitions of open-source companies have been a big topic of conversation ever since Red Hat acquired JBoss in April 2006. Many of us in the software industry thought that one or two large companies would snap up and consolidate several open-source companies in attempt to offer a complete open-source stack. But an open-source consolidator has yet to materialize.

In recent conversations with a number of open-source executives, it's come to light that many potential acquirers are less attracted to open-source companies that require more investment before generating revenue.

Considering that there are few private open-source companies generating beyond $15 million in annual revenue, an acquisition of an open-source company could certainly be tough for a public company to explain to Wall Street.

While a focus on the bottom line makes sense, product investment comes from many angles, not the least of which are users and developers, key drivers in VMware's acquisition of SpringSource.

If you follow the way Oracle and IBM acquire others, you see them expand portfolios--sometimes to the point where they own several similar product offerings. But from a competitive perspective, this is not necessarily a bad thing.

IBM already offered BPM, or business process management, products but acquired Lombardi to gather the revenue streams under their umbrella. Oracle, on the other hand, offered a whole suite of middleware before it acquired BEA Software but did so to achieve the economy of scale and single-source purchasing power that buyers seem to want. Oracle also acquired and immediately shut down Virtual Iron to get the product out of the market.

They may not be pretty, but these are smart tactics. … Read more

Essentials for open-source mergers and acquisitions

Software mergers and acquisitions have been on overdrive this week, with Adobe, Google, and Intuit collectively spending roughly $2.5 billion to add to their respective product lines. Against this backdrop, OStatic's Sam Dean asks, is the time ripe for open-source mergers and acquisitions? The answer is a resounding, "maybe."

Virtually all M&A is motivated by a search for strategic value. That value comes from acquiring expertise in emerging markets, like cloud computing or virtualization, or by delivering developer communities, as VMware got by buying SpringSource.

This is why Dean is right to point to … Read more

Open-source M&A: The scorecard to date

What is the value of an open-source asset? Over the past several years, and most recently with SpringSource, we've seen a number of open-source companies acquired at valuations of 10x or better. Did the buyers get their money's worth?

It's a tricky question to answer--and likely depends upon far more data than I have at my disposal. It also depends on the acquiring company executing, which has not been the case with Yahoo (which bought Zimbra) or Sun Microsystems (which bought MySQL). No open-source company can offer a panacea for an acquiring company's failure to execute.… Read more

Apache makes its first $420 million

Others and I have made much of VMware's acquisition of SpringSource for $420 million, but one crucial point has been overlooked: this is the first big acquisition of a company that depends on the Apache license.

Yes, we've seen smaller acquisitions of open-source companies that rely on Apache-style licensing. IBM acquired Gluecode (Geronimo project), SpringSource bought Covalent (Tomcat), Oracle acquired Sleepycat (Sleepycat, BSD license), and there have likely been others that I'm simply not remembering.

But the big, head-turning deals? GNU General Public License (GPL). Every one of them.

Nearly every other big open-source acquisition, from JBoss ($… Read more

Investor reveals secret to $1.6 billion in open-source success

No other investor has had as much success in open-source software as Peter Fenton, general partner at Benchmark Capital.

A competitive triathlete, Fenton has turned the standard marathon of open-source business-building into a sprint, churning out four big open-source sales--JBoss ($350 million), Zimbra ($350 million), XenSource ($500 million), and SpringSource ($420 million)--while most investors have yet to turn a profit on any.

Not that Fenton is a one-trick pony. He also just sold FriendFeed to Facebook and sits on the board of Twitter. It's fair to say that Fenton can now afford a second Aston Martin.

But Fenton … Read more

VMWare, SpringSource to revolutionize Java development

VMWare's acquisition of SpringSource this week is a significant development in the history of the Java development platform.

I have been working closely with VMWare for some time now, and I know a little bit about how the company sees its role in the cloud. The acquisition of the commercial open-source middleware/framework company makes perfect sense to me.

SpringSource gives VMWare a development "platform," of sorts, to deliver in VMWare-based cloud services and a unique declarative environment in which to define both application construction and deployment architectures. The vision painted by SpringSource CEO Rod Johnson speaks … Read more

VMware puts squeeze on Red Hat with SpringSource buy

I've been writing a lot lately about SpringSource, largely because it has demonstrated a big vision (nothing less than the redefinition of the application server and an end-to-end application story), and so I wasn't terribly surprised today to see VMware buy SpringSource for $420 million. On roughly $20 million in sales, much of that services, it's a rich valuation, but one that is absolutely deserved given SpringSource's potential.

In fact, it's almost certain that SpringSource sold too early, at least as measured the size of potential exits it could have had given a bit more … Read more

How SpringSource is taking on Java Goliaths

Some argue that open-source software can't innovate. In fact, one of the industry's former executives, Peter Yared, recently argued that "the only successful open-source companies sell commodities."

Yared clearly hasn't heard of SpringSource, an open-source application platform provider that is redefining the J2EE application server and, quite possibly, the future of open source.

Yared isn't alone in his beliefs. A friend recently wrote me to suggest that open source is at its best when disrupting big, profitable markets:

Commercial open source is a (commodity) replacement market. When it is not (i.e., people are … Read more