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What is an Open Source Company Really Worth?

Posted by ScuttleMonkey on from the sleeping-with-dollar-signs-in-your-eyes dept.

CNet has an interesting profile of MySQL, JBoss, and Zimbra, exploring what an open source company is actually worth. "Given how slowly revenue accumulates in an open-source company--assuming it is recognizing subscriptions over 12 months--bookings is probably the valuation metric being used or at least strongly considered. It surely is the metric by which the start-up wishes to be measured. So while Savio suggests we open-source entrepreneurs may be "sleeping with dollar signs in (our) eyes," there's clearly a lot of work to do before most open-source companies are worth selling. It's not worth selling out for $100 million. Not for the venture-backed companies, anyway."

6 of 82 comments (clear)

  1. I can't RTFA! by TibbonZero · · Score: 2, Insightful

    How did this make it to the front page? Someone needs to know that links are better than just a summary. I'm honestly interested in reading for this, but instead of clicking on a link (hello, this is the web!) I have to Google around for it. Lame submission.

    --
    Tibbon
    tibbon.com
  2. OSS does not eliminate old rules. by jedidiah · · Score: 4, Insightful

    How do you value ANY company?

    They own stuff (buildings), they have staff and they have current revenue.

    It really shouldn't be that hard.

    I wouldn't evaluate the worth of Oracle based on what I thought the
    value of the Oracle RDBMS sourcecode was worth. I would look at what
    they are selling to people.

    With enterprise software, frontend licensing is just the tip of the iceberg.

    MySql corp really isn't that much different than Sun, IBM or Oracle in this respect.

    --
    A Pirate and a Puritan look the same on a balance sheet.
  3. Wrong Question by curmudgeon99 · · Score: 3, Insightful

    This has it backwards. After a vendor such as JBoss has created a fully functionnal application server such as JBoss, what are properties such as WebSphere, WebLogic and JRun worth? How much would you pay once you realize you can get the same outcome for free? Sure, there are some old companies out there who still need the warm fuzzy that comes from paying $15,000 for WebSphere--but in the long run, what is that business worth? Not a lot. JBoss has already pulled a fast one anyway. What used to be free, circa JBoss 4.0.2, (embedding the app server in a shrink-wrapped application) is now for a fee. I used to work for a company that bet the farm on JBoss 4.0.2. And you know what they're doing now? PAYING JBoss. They have no choice.

  4. Re:GPLv3's Poison Pill and Open Source buyouts... by Alphager · · Score: 4, Insightful

    That is no side-effekt.
    The copyright-owner can _ALWAYS_ choose whichever damn license catches his fancy, including some evil, sign-to-sell-your-soul-style EULA.
    It is working as intended.

  5. Re:Easy Answer by goldspider · · Score: 2, Insightful

    Informative?

    Make something valuable to someone with lots of money and they'll pay lots of money for it.

    Doesn't that require one to quantify "value"? And isn't that determination the whole point of TFA??

    I imagine such simplistic cliches aren't of much use to real accountants.

    --
    "Ask not what your country can do for you." --John F. Kennedy
  6. Re:The point... by blitzkrieg3 · · Score: 3, Insightful

    What is to keep another company, say NySQL Inc. from taking the source code to MySQL, compiling their own product, and then reselling it? Nothing. You might say "It's illegal!", but that's ONLY in the USA.
    Where do you get your information? It is legal to do that in the USA, as long as you adhere to the GPL. Though I suspect MySQL would have an extremely strong case for trademark infringement.