Open Source

The almighty $1 billion has lost its open source value

Matt Asay thinks that achieving $1 billion for open-source companies isn't as big of a deal as it used to be. Do you agree?

 

Open source money
 iStockphoto
 

Kickstarter just passed $1 billion in pledges. While it's great that Kickstarter corralled 5.7 million people to help fund a heck of a lot of documentaries, tech startups, and more, $1 billion isn't what it used to be.

Open source and the $1 billion barrier

For years, $1 billion was the goal for open-source companies. Back in 2006, RedMonk analyst Stephen O'Grady suggested that it wasn't necessarily the ultimate goal, but he also pondered whether open-source economics could measure up to $1 billion. Then, in 2012, Red Hat surpassed $1 billion in annual revenue, and as an industry, we largely gave up the goal of there ever being another.

In fact, former XenSource CEO Peter Levine argued that there will never be another $1 billion Red Hat (echoing my thoughts back in 2011). It's not that companies using open source won’t make a lot of money, but they won’t make $1 billion selling support.

We'll continue to see plenty of billion-dollar companies making money with open source. In fact, if you peruse The Wall Street Journal's list of the billion-dollar startups, most of them heavily use open source (like Instagram, which was sold for $1 billion and built on open-source and cloud technologies).

More billion-dollar bets

Back in 2000, IBM announced that it was going to invest $1 billion in Linux. It completely changed the industry. I worked for an embedded Linux company at the time, and IBM's commitment changed every conversation from "Trust me, Linux's free software license won't kill you" to "How many systems would you like to order?"

It was groundbreaking.

This isn't so today. Recently, IBM pledged $1 billion to prop up Linux on its Power systems. Few seem to have noticed. That's because, as RedMonk's Donnie Berkholz pointed out, IBM makes a lot of billion-dollar commitments these days. They just don't resonate as much as they used to.

And why would they? In addition to billion-dollar valuations, billion-dollar commitments, and billion-dollar revenue companies, we also have a $1 billion open-source hardware market, the OpenStack ecosystem nearing a $1 billion valuation, Facebook saving $1 billion by developing and then open-sourcing its own data centers, and more.

"Billion" is now common, at least when it comes to open source and open innovation. It may not generate page views, but it remains a symbol of just how much value open technology creates.

Do you agree that the almighty billion has lost its value? Share your thoughts in the discussion thread below.

 

 

About

Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. He is currently VP of Mobile at Adobe. Previous positions include VP of business development and marketing at MongoDB and COO at Canonical, the Ubu...

7 comments
psengr_techrep
psengr_techrep

It's less important by 3% compounded each year.  

pmshah
pmshah

@janitorman 

I quite agree with you but most of the pharma companies would not. Nor would all those bio-food companies. We in India made a big time blunder. After independence we concentrated on health care and reducing infant mortality. What was stupidly forgotten was the accompanying AND absolutely necessary reduction in fertility rate. As a consequence we have annual compounded population growth rate of 2 %. No country in the world can sustain that. This earth can't sustain that. All that was required was total stress on education. That would have got people thinking and planning their families. In 67 years since independence only achievement we have is multiplying the population 350 % !!!

janitorman
janitorman

With the devaluation of our currency, inflation has run wild in the last 100 years or so. Any currency is now practically valueless in today's society. About 1900 there were only about 8 billion dollars in currency available worldwide, including all countries "money." 

This is unacceptable to me, as is the huge population. There should only be about 1 million people worldwide, using barter, or preferably, no trade at all. Our technology, energy use, and covering the land with buildings, which are not neccesary for human habitation (caves  were fine) are also unacceptable. Hopefully a plague or nuclear war will undo the changes made in the last 100 to 300 years.

CodeCurmudgeon
CodeCurmudgeon

IIRC, back in the early '90s a couple hundred million was all it took to make the Forbes 400. Nowadays Billionaires don't necessarily make it.

davelab6
davelab6

Red hat sells software development on subscription, not support

mudpuppy1
mudpuppy1

@janitorman Since you seem to have a severe dislike for humanity, I suppose your solution is some sort of mass executions? Maybe a selective disease you would like to release? Of course, you and your ilk would be the ones to choose who dies and also be the ones to survive and do better, right? Worship "Mother Earth", kumbaya and all that? Why don't you and your Luddite buddies do us all a favor and start the process by offing yourselves?


People like you disgust me. YOU are unacceptable to me. I heard there were people like you, but I didn't believe anyone could hold such ridiculous views.


If you hate technology so much, what are you doing on our Internet?

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