• On CHOW: Sexy vampire party
October 19, 2007 5:29 AM PDT

Ballmer shopping for open-source companies. Who's for sale?

by Matt Asay
  • Font size
  • Print
  • 4 comments

Sometimes I read things like this and I'm relieved to find out that Steve Ballmer isn't completely deluded by proprietary ideology. Speaking at the Web 2.0 Summit today, Ballmer made it clear that his vendetta against open source isn't as all-encompassing as he sometimes makes it out to be:

"We will do some buying of companies that are built around open-source products," Ballmer said during an onstage interview at the Web 2.0 Summit in San Francisco.

A refusal to consider acquisitions of open-source developers "would take us out of the acquisition market quite dramatically," Ballmer said -- a tacit acknowledgment of how thoroughly open-source development has reshaped the software market.

In other words, with the world moving to open source there wouldn't be much left to buy if Microsoft were to rule out open-source acquisitions. Especially since Oracle has already bought all of the proprietary companies. :-)

My, how the world has changed.

We need a bit more of this side of Ballmer: the rational side that recognizes that Microsoft needs to engage, not estrange, the open-source world if it wants to continue its success of the past three decades into the next three decades. The software world is changing - Microsoft must adapt to keep up.

I suspect Microsoft's first open-source acquisition won't be of a pure-play open-source vendor. Rather, it will necessarily be of a company that uses open-source as a tertiary yet still important aspect of its business.

Like Atlassian. Today Microsoft and Atlassian announced integration of Atlassian's excellent Confluence wiki with Sharepoint. Tomorrow perhaps they'd tie the knot permanently?

Atlassian would make sense because while it is not an open-source company, its ethos resembles that of an open-source project. It could be a Ximian-esque acquisition for Microsoft, bringing open-source DNA to the company must as Ximian did to Novell.

Other candidates? 37Signals. 37Signals would give Microsoft Basecamp: open source at its core, but SaaS in its implementation/value. It's a perfect story for Microsoft, and exceptional DNA for the company.

Or how about SugarCRM? SocialText (if that Atlassian acquisition falls through ;-)? Jive? OpenAds (this one would be truly game-changing and is actually a very good fit)?

Or Novell? The two companies already act like kissing cousins. But for the complications for Microsoft in overtly distributing Linux, this tie-up makes a lot of sense.

There are many good candidates, once Microsoft opens its mind to consider open-source acquisitions. Now it just needs to behave in such a way that open-source companies won't blanch at the thought of being acquired by Microsoft. Money isn't everything. Credibility matters a great deal, and open-source companies need to be able to look their communities in the eye with a straight face, without shame.

Comments like Ballmer's today set the right tone. I'm hoping for more like this.

By the way, for such acquisitions to work, Microsoft would have to give up its fetish for having its products work primarily with its other products. An Atlassian would need to support Linux, etc. It's no good to bring an open company into the Microsoft fold and then close it off. Red Hat has been learning the inverse lesson with JBoss. It's fine to guide preferred choices, but not to dictate them.

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.
Recent posts from The Open Road
Apache: 'No jerks allowed'
Cloud to suck money out of market, report says
When open source isn't (open enough)
SAP wants an open Java process (pot, meet kettle)
Google shifts software value to operations, away from IP
Mobile: Still waiting to see what sticks
Google privacy controls: Most people won't care
Amazon's move mocks EU's fear of Oracle
Add a Comment (Log in or register) (4 Comments)
  • prev
  • 1
  • next
RE acquisition
by jsilvers October 19, 2007 7:35 AM PDT
Matt, thanks for the coverage. It is interesting that whenever Microsoft gets involved in something, people immediately think "acquisition". When Facebook didn't sell the Yahoo for $1B, people thought they were crazy. Maybe people look at Atlassian in the same way? Atlassian is interested in building an awesome business, one that's made to last, not made to be acquired. Who knows what the future holds, but I wouldn't bet any money on a MS acquisition.
Reply to this comment
SaaS (ASP) model for Microsoft
by royrubin October 19, 2007 9:40 AM PDT
Matt - I think you bring up some interest points. With Microsoft's Live platform, I believe they will be looking at companies with an on-demand module that can be plugged in. This certainly opens up the field to many web 2.0 companies with an open source foundation.

Roy
Magento (open source eCommerce)
www.magentocommerce.com
Reply to this comment
2 Thoughts
by john.mark October 19, 2007 9:45 AM PDT
I thought SocialText was already bought by Microsoft... did I just imagine that?

Watching an open source community react to an MS acquisition will be very very interesting to behold. It really just depends on the DNA of the company + community.

-John Mark
http://www.hyperic.com
Reply to this comment
M$ buying Novell sounds pretty weird
by bkaindl October 19, 2007 9:57 AM PDT
Hi Matt, please no offense, but your suggestion that M$ would like to buy Novell sounds pretty weird to me.

While I'm unsure of Atlassian (I think that even if could be completely private owned and the owners have no intention to sell, I think it's only a questions of price...), I think a scenario where M$ would buy Novell does not make any sense to me from a Microsoft viewpoint:

If Microsoft would buy Novell, it would buy Netware, Groupwise and SUSE with it. It would dump all three of them because all of them are competitors to own products.

Besides, if Microsoft would distribute SUSE Linux, Microsoft would violate the GPL when it would ask royalities for GPL code, so Balmer's "pay us" would have to change to a pure "you'll have to pay the trolls".

In any way I look at it, "The two companies already act like kissing cousins. But for the complications for Microsoft in overtly distributing Linux, this tie-up makes a lot of sense." sound much like sarcasm to me, and I guess that must be the way you intented it to write it, but I do not see it. Maybe just add a smiley afterwards so that people can guess that you do not mean that serious... :-)

If not, I'd be interested to know what you think might be Microsoft's motivation in buying Novell besides crushing a competitor and buying the UNIX rights...?
Reply to this comment
(4 Comments)
  • prev
  • 1
  • next
advertisement

A CNET Conversation with Eric Schmidt

CNET's Tom Krazit and Molly Wood sit down with Google CEO Eric Schmidt to discuss the future of Android, the Chrome OS, the problem of real-time search indexing, and more.

Verizon tests sending RIAA copyright notices

The No. 2 phone company, known for its reluctance to intervene in antipiracy cases, strikes an agreement to forward copyright notices on behalf of the music industry.

advertisement

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.

Add this feed to your online news reader

The Open Road topics

advertisement
advertisement

Inside CNET News

Scroll Left Scroll Right