Open Source Constants | InfoWorld

Index Ventures partner Mike Volpi had just secured a $ 1 billion payday at Confluent’s IPO ($ 1.3 billion to be exact).When doing so He told TechCrunch Venture capitalists weren’t very “hyped” about investing in open source in 2015, and that this has only changed recently, he can forgive a little revisionist history. all right. But since Red Hat unveiled Hughes in 1999, VCs have been investing in open source and haven’t slowed since. What has changed is the type of successful open source investment.

Open source that was successful by imitating proprietary software. We are now winning by creating a whole new category. (And yes, Volpi has succeeded in investing in both.)

Faster and faster

I worked for the first open source startup (Lineo) in 2000. Raised about $ 60 million We promise to incorporate Linux into many new devices that are the predecessors of smartphones, from microcontrollers to personal digital assistants. We were part of many of the open source companies that were raising money at the time, with companies such as TurboLinux and LinuxCare investing more than $ 700 million in building a Red Hat IPO. Lineo burned in 2002 and was sold as scrap. Of these other companies, open source is soldiers, and VCs are anxious to keep shaking in search of a billion-dollar fence.

By 2005 New York Times I was writing aboutOpen wallet for open source, “Quoting investments in JBoss, SugarCRM, MySQL and more. They quoted me and insisted that “in a year we can guarantee that there will be dozens of companies using the SugarCRM model” for open source monetization that relies on a combination of open source cores and proprietary add-ons. .. Extension.

I would like to say that it was foresighted, but it was simple math. Open source quickly became dominant among developers, and VCs recognized this. Some VC companies, such as Volpi’s Index Ventures and Peter Fenton’s Benchmark, were quicker to recognize trends and invested heavily. Volpi has invested in Confluent, Elastic, Cockroach Labs, Hortonworks, Kong, and Starburst and has the right to take pride in its ownership in this category. His company can add MySQL etc. to its roster.

Even slow-moving VCs have caught up with billions of investments and tens of billions of returns. In 2018 alone, IBM’s acquisition of Red Hat generated $ 55 billion in open source revenue, but OSS Capital’s general partner Joseph Jacks said. Keeps a summary of all revenues And while not all companies he recognizes as open source fit that description, it’s still enough for a final total of well over $ 100 billion.

Copyright © 2021 IDG Communications, Inc.

Open Source Constants | InfoWorld

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