Wide Open (Source) Software

2018 has been the biggest year for open source software (OSS), evuh.

So writes Astasia Myers with Redpoint Ventures:

The most significant exit for an open source business was IBM’s $35B acquisition of Red Hat. As my colleague Tomasz Tunguz claimed, it was “a triumph of open source.” Red Hat’s acquisition was the largest software acquisition in history, and the third largest technology acquisition after Dell/EMC at $67B and JDS/SDL for $41B.

Next, in early November VMware acquired Heptio, a startup that helps companies deploy and manage upstream Kubernetes. Founded by ex-Googlers Craig McLuckie and Joe Beda, Heptio was mostly a services business with some open source projects like Ark, Sonobuoy, Contour, and Gimbal. Heptio competes against Red Hat so it is clear VMware is trying strengthening its role in the cloud-native ecosystem.

Hortonworks had a $5.2B merger with Cloudera, and Myers notes that there’s been at least $46.8B spent on acquiring open source companies.

See Myer’s post for a full breakdown of OSS deals since 2011.

The rise in open source and cloud solution has also led to some changes in the more traditional vertical software market.

Just today, HCL Technologies has paid $1.8 billion to pick up a number of IBM Software products, including Notes and Domino; Connections; on-prem versions of Portal, Commerce, and Unica; BigFix; and AppScan.

According to ZDNet:

“The products that we are acquiring are in large growing market areas like security, marketing, and commerce, which are strategic segments for HCL,” president and CEO of HCL Technologies C Vijayakumar said.

“Many of these products are well regarded by clients and positioned in the top quadrant by industry analysts.”

Vijayakumar added the company sees “tremendous potential” for creating as-a-service offerings by combining the acquisitions with its existing products.

A year ago in October, IBM had already entered into an arrangement that had HCL become responsible for the development of Domino products. 

End of an era?