A rollercoaster - as trite as that image may be - is the right analogy for
venture capital investing in open source companies. And what a long, strange
trip it's been.
Starting in the mid '90s, a few brave pioneers like Benchmark invested in an
open alternative to proprietary software and made a fortune. By the end of
the decade, everyone wanted a piece of the action. A second wave of VCs
rushed in at ridiculous valuations and got their clocks cleaned. In 1999 and
2000, over-capitalized, over-valued open source companies burnt through
hundreds of millions of dollars. Shame on the dumb money that gives efficient
markets a bad name. Then, the bubble burst, and we entered nuclear winter
followed by the trauma of 9/11. Valuations plummeted to the ground. Investors
panicked... (more)
The open source movement is something completely new. It doesn't fit neatly
into any accepted economic or business theory. For that reason a lot of
traditional thinkers, e.g., economists, business people, and investors, are
struggling to figure out what it means. Is it the beginning of a new economic
order or is it a flash in the pan?
The idea that 400,000 software programmers around the ... (more)
At LinuxWorld Expo in San Francisco, it occurred to me that I had overlooked
a very important Open Source business model, the Membership Model. Confronted
by a keynote speech by Stuart Cohen, the leader of the Open Source
Development Lab (OSDL) (www.osdl.org), it became clear that I had jumped into
the Advertising and Conversion Models too quickly and had to back up and deal
with the mem... (more)
I've always wondered where the word "oxymoron" came from. What does "oxy"
have to do with "moron"? What about the words "commercial" and "open source";
do these words form an oxymoron when combined in one phrase?
The open source-based CRM software maker, SugarCRM, has successfully combined
these polar opposites and implemented such a "commercial open source"
business model. SugarCRM has t... (more)
Looking at the open source software industry from the outside, it's often
difficult to tell what is really going on. To use a string of clichés, it is
hard to peel back the onion, to look behind the curtain, to perceive "Das
Ding an sich" (German for the "thing-in-itself"; an idea made famous by the
last Enlightenment philosopher, Immanuel Kant.
http://en.wikipedia.org/wiki/Immanuel_Kant... (more)
Paul L. Sterne is general manager, Americas, Open-Xchange Inc. (www.open-xchange.com), and managing partner, Sterne & Co. LLC, an M&A boutique specializing in technology deals. His most recent transaction: the acquisition of Protocom Development Ltd. by ActivCard Inc. He is a sponsor of openResource, a wiki about the Open Source industry (http://sterneco.editme.com/home).
Keith Bergelt
Gaurav Mantri
Aditya Banerjee
John Karamitsos
Kaj van de Loo
Bob Little
Alois Reitbauer
Chris Schin
Richard Gordon
Anil Parambath
