EMC reportedly buys SourceLabs, but for what purpose?
TechFlash is reporting that EMC has purchased SourceLabs for an undisclosed fee. The unanswered question in TechFlash's report is why EMC would buy SourceLabs, a provider of support tools for Linux and other open-source software.
It's not that SourceLabs isn't a good company. I have followed SourceLabs since its inception, meeting with founder and CEO Byron Sebastian back at OSCON (in 2003) before the company was founded in 2004, and spent some time in the SourceLabs office in 2004 getting a demo of its technology. It was cool back in 2004, and has improved since then.
In addition, SourceLabs has managed to pull in some big-name customers like Fidelity and Merrill Lynch, demonstrating that it offers real value to real customers. Unlike some competitors like Spikesource, SourceLabs focused early on big enterprise needs and arguably did a better job of tailoring its products to meet those needs than its competitors, notwithstanding its share of financial struggles, which TechFlash details.
No, my question is what EMC, largely a provider of storage solutions, gets from a relatively broad-based open-source support technology company. TechFlash points to Swik.net, SourceLabs' open-source news and information repository as a source of value for the company, but I'm guessing that EMC didn't buy SourceLabs for Swik.net, given that the company had been contacting potential buyers just a few weeks ago to gauge interest in buying Swik.net, likely because EMC wasn't interested in that part of SourceLabs' business.
No, I don't think EMC is interested in an open-source community site, but it's clearly interested in the core SourceLabs technology. I'm struggling to understand the fit. Is EMC hoping to tap into expertise in various open-source technologies? If so, to what end?
I've asked SourceLabs' executive team for comment but, in the interim, anyone care to venture a guess as to what EMC is hoping to get from SourceLabs?
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. 
Apart from using sourcelabs to improve their self support systems (which would be very welcome by their customers!), no idea what they may want to do with it
1) "SourceLabs serves thousands of IT professionals with our patent-pending support technology"
2) "SourceLabs SASH 2.0 production release and subscription provide a dependable, open platform for rapid Java web application development."
EMC seems to have grand plans for The Cloud with their Decho ("Digital Echo") unit, first targeting Consumers (store photos, movies, etc. online) with an eye of that market bleeding into the Enterprise in the same way that Google develops their markets. Perhaps they wish to build a developer community and provide developer services, around Decho? Seems that VMware (which EMC owns) would be a key foundation to Decho.
http://www.emc.com/products/family/smarts-family.htm
In my opinion.
Thank You.
Caio'
Perhaps one way to look at it is to flip your question: not ask what value sourcelabs can bring to EMC, but ask what value EMC can bring to sourcelabs.
If you take the approach of portfolio-based corporate strategy, you can see how EMC may be able to create shareholder value with this acquisition.
EMC has a huge penetration in the corporate market, their contact point is the IT department, more than developers, and that happens to be sourcelabs'target. They should be able to grow the SL business much faster and cost-effectively than SL on its own.
1. Swik.net, which essentially siphoned off hits on Open Source projects from Google by scraping data about them from other sites like Sourceforge and Freshmeat and providing , and using that to populate a wiki that others could edit. Swik was very high-ranked on Alexa at one time. Google may have made their system smarter about going to the original sources, as they don't feed as many hits to Swik as they once did.
2. A sort of A.I. engine which would scrape mailing lists of Open Source projects and correlate them to error messages, etc. Then you could search for issues on Open Source, and this would give you data that was better than what you'd get from Google. As of yesterday, they were selling this service for $9.95/month.
I took a half-time VP position there for several years, so that I'd have a lot of time to be with my little boy while he was growing up. Of course you can't go back later and fix problems with bringing up your kids, so I'm very thankful to Sourcelabs for providing that opportunity. I asked to be laid off and left in late 2007, for the good of the company.
I think you should consider this sale to be "going out gracefully" for Sourcelabs. They weren't a big hit as a business, and they had some interesting assets that might have gone for a few Million, and some of the remaining employees were really good and will continue to be employed.
Bruce
- by 30003001 January 7, 2009 10:22 AM PST
- "Wow, still enjoying those sour grapes there, Bruce?"
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- by BrucePerens January 9, 2009 4:58 PM PST
- Mr. "30003001", this wasn't meant to be a sour-grapes comment. I was attempting to do an accurate rendition of what went down there. I was careful to spell out why I appreciated working there, and did not criticize the management.
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(10 Comments)4 out of 5 businesses fail. I'm off building a new one, and I'm the CEO this time so it's on my shoulders if it fails, not someone else's as was the case with Sourcelabs.