Because of the valuation Sun (JAVA) put on its acqusition of MySQL’s open source database software business on January 16, we said that open source infrastructure and middleware software companies would need to start pairing up with “proprietary” partners fast (see second point in linked blog post). Their value was dropping.
Trolltech of Norway has wasted little time, agreeing to be acquired by Nokia (NOK). The issue for most of the open source software (OSS) folks now is that
— Citrix paid somewhere north of 100x 2007 revenue for XenSource in October 2007, betting it would be 10x 2008 revenue
— Sun paid 20x 2007 revenue for MySQL in January 2008, betting it can take on the market-dominant Oracle (ORCL) database without having to spend the R&D dollars to develop a database from scratch
— On January 28, Nokia looks to have paid four times Trolltech’s 2007 reveue (subject to a guess at Trolltech’s growth in 2007 over 2006’s 174.1 Norwegian Krone and subject to my doing the currency conversion correctly).
If there’s big value in OSS now, it’s in the applications side of the market, exemplified by Yahoo’s (YHOO) 2007 acquisition of Zimbra.
But that window may be closing fast as well.– Dennis Byron