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October 2, 2008 8:16 AM PDT

Is the end near for independent open source?

by Matt Asay
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For the first time I'm scared for open source. Not open source as a global movement and way of doing business and software development - that's safe. Even Microsoft believes in it.

No, I worry for Red Hat. As I wrote the other day, if Red Hat's stock continues to tumble it becomes ripe for an Oracle acquisition. Red Hat has been doing exceptionally well selling into a down market, growing quarter after quarter.

But Wall Street doesn't seem to care. To help telegraph its own confidence in its future, Red Hat has now initiated a $125 million share buyback to hold up its share price.

Let's hope it works. Losing Red Hat as an independent open-source vendor would effectively call an end to open source as a standalone software strategy. Some may cheer at this prospect, but I think the software world would be poorer for having open source serve as a minor component in everyone's arsenal, rather than having Red Hat showcase that it's a viable business strategy on its own.

Customers would also be poorer, as The VAR Guy notes. We need an independent Red Hat. We need the market to recognize that open-source Red Hat promises to deliver more value for lower cost in a recessionary market. Customers appreciate that fact and will buy into it. When will Wall Street recognize what customers already know?

Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay.
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About The Open Road

Matt Asay brings a decade of in-the-trenches open-source business and legal experience to the Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is general manager of the Americas division and vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure.

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