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The seven largest Open Source deals ever

To say that there were some noise on the Web when Sun recently bought MySQL for $1 billion would be an understatement, to say the least. It’s the largest open source deal ever, and the latest in a series of large open source acquisitions.

We kind of understand why Sun thought MySQL was worth a whole billion. Not only is it good software, it’s used basically everywhere! We at Pingdom use MySQL as the database of choice for our uptime monitoring service, storing settings and millions of test results every day. It’s highly scalable.

In light of the MySQL acquisition, we decided to find the largest deals in open source history. A lot of open source companies have been bought in the last couple of years, with hundreds of millions of dollars trading places in the process.

Here are the seven largest deals that we could find the numbers for:

    1. Sun buys MySQL, $1 billion, 2008
      Sun now has their hands on the world’s most widely used open source database.
    2. Red Hat buys Cygnus Solutions, $675 million, 1999
      Red Hat started the open source acquisition race early when they bought Cygnus Solutions, providers of open source software support.
    3. Citrix buys XenSource, $500 million, 2007
      Considering how hot virtualization is right now, we can see why Citrix bought XenSource, the company behind the Xen virtualization software.
    4. Yahoo buys Zimbra, $350 million, 2007
      Yahoo already have their own email services, and with Zimbra they got an integrated email, messaging and collaboration software.
    5. Red Hat buys JBoss, $350 million, 2006
      Red Hat strengthened their SOA offerings by buying the JBoss Java application server.
    6. Novell buys SUSE, $210 million, 2003
      Novell got their own Linux distribution by buying SUSE.
    7. Nokia buys Trolltech, $153 million, 2008
      Trolltech is the company behind the Qt GUI framework which is used by the popular Linux desktop environment KDE.

 

Buyers of open source companies
Above: The buyers in our top seven list.

There are also a number of deals we couldn’t find the numbers for (not all deals have their numbers disclosed). Here are some examples:

    • SpringSource buys Covalent Technologies, 2008
    • Apple buys CUPS, 2007
    • Sourcefire buys ClamAV, 2007
    • Oracle buys SleepyCat, 2006
    • Oracle buys InnoDB, 2005

 

Open Source deals are on the rise

According to the analyst company 451 Group the number of open-source deals have increased significantly the last three years. In 2004 there were only three significant deals. Compare this with the 15 significant deals made in 2005, 22 in 2006 and a whopping 30 in 2007. That’s a 10-time increase in three years. And as we already mentioned, 2008 started off with a bang with the Sun-MySQL billion-dollar deal.

Will this trend continue, or is the open source industry experiencing something of a gold rush at the moment? Only time will tell. 2008 is going to be an interesting year.

What will the next big deal be? Did we miss something in our top seven list? Let us know in the comments.

(A small update: Since the Sun-MySQL deal is the first deal to surpass the record set in 1999 when Red Hat bought Cygnus, Paul McNamara over at Network World got hold of Michael Tiemann, the founder of Cygnus and now at Red Hat, to pick his mind on the trend of open source acquisitions and why Red Hat paid so much for Cygnus in the first place. An interesting read.)



No Comments

I’m curious about one thing: If a project is open source and have been developed at least partly by volunteer programmers from around the world, how can you then sell what is essentially a collaborative project?

I mean, for example, I understand that Xensource is a business and XEN itself is still open source, but. I just think it’s fascinating how much money is being thrown around. Someone is certainly getting rich, partly based on the efforts of others who have done work for free.

Hopefully these deals allow more resources to these projects and act as something positive, and that regular (small) users can still get it for free.

Ghandi, it all depends on the terms of the buyout, and what sort of contributor’s agreement the project has.

Linux, for example, could almost never be relicensed as every bit of code that people have written remains under their copyright. By sticking it in the Linux kernel, they have agreed to let it be licensed under the GPLv2, but in order to change it to, say, a BSD license, Linus would need to get permission from everybody who has ever contributed to the kernel.

On the other hand, MySQL has an agreement saying that all contributor’s code belongs to them. This means that they own the exclusive copyright the the code, ergo, they can do whatever they want with it. If they want to release it under a proprietary license, there is no reason they couldn’t do that.

Also, when purchasing the company, Sun (in the case of MySQL) could have a clause stating that, while all the code would become property of Sun Microsystems, there would be no licensing changes, etc. Because of agreements like that, they can buy the projects without sacrificing their open-sourceness. Of course, depending on the agreement (again), Sun could relicense it at a later time, but this, as just about everything, is dependent upon the agreement reached when the purchase was made.

If I remember correct wasn’t there talk about Oracle having plans to take the whole MySQL code and to create their own fork? I guess this was only speculations.

But would this be possible? If I understand Dan’s information right, MySQL owns the code but it’s still open source so they should be able to as long as they keep it as open source.

I’m confused… :)

As far as I can tell from their licensing pages, there’s no reason Oracle couldn’t create a fork of MySQL, as long as they released it under a compatible license. I don’t really see a reason they would do this, but as far as I can tell it would be perfectly legal.

The use of open source environments for enterprise software projects is
growing at an unprecedented rate. We would prefer a open-source software for that for further customization. I have found Paragent software which seems to be looking good so far, any suggestions regarding this would be appreciated.
Thanks in advance
techbrain55