Two Open Source Firms On List of Companies That May Not Survive 2009

by Sam Dean - Jan. 12, 2009Comments (3)

From the Bleak Predictions Department, ChannelInsider has a slideshow up of 12 tech companies that may not survive 2009. The list of companies comes from solution providers that ChannelInsider surveyed, and includes some surprisingly big and powerful players. It also includes two leading, public open source companies. Who made the list?

Here are the 12 companies that the solution providers surveyed by ChannelInsider said would not survive this year (where not surviving may mean being bought out, not necessarily folding):

  • VMware
  • Symantec
  • Citrix Systems
  • Sun Microsystems
  • AMD
  • CA
  • Juniper Networks
  • Salesforce.com
  • McAfee
  • Check Point
  • NetApp
  • Novell

Novell and Sun Microsystems are the two big open source players on the list, and I've made the point before that these companies' market capitalizations are barely above the amount of cash they have which could definitely make them acquisition targets. They could be bought simply to shut parts of them down. However, I agree with ChannelInsider's rebuttal that Microsoft has a pronounced vested interest in keeping Novell around, if for no other reason than to slow down Red Hat's growth. That could be a big factor in any attempt to acquire Novell.

With regard to Sun, the company is definitely cheap at current prices, but ChannelInsider asks "who has the cash" to buy it? That is a good question, and one might want to answer that Microsoft does, but Microsoft stays out of antitrust trouble by being able to point to other operating system makers, and would face heaps of regulatory trouble if it ever considered buying Sun, especially if it just wanted to shut parts of the company down. It's hard to see which other big tech company with enough cash for a Sun acquisition would have much synergy with Sun's product portfolio.

There is no doubt that acquisition is a possibility for Sun and Novell, though. I also think acquisitions will generally be on the rise.

I'm not sure I agree that VMware won't last the year. I've written about the substantial threat that VMware's virtualization strategy faces from free, open source virtualization products and from offerings bundled in operating systems (Microsoft, Sun and Red Hat have free bundles). Still, VMware is still a large company and would be an expensive, questionable acquisition for anybody. I think it faces attrition that will extend beyond this year.

Some of the other companies on the list also strike me as too big and well capitalized to necessarily be in the line of fire this year. Salesforce.com has a very loyal user base, and software-as-a-service (SaaS) makes lots of sense in this economy, so I don't think it's going anywhere.

Do you agree with ChannelInsider's list?


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3 Comments
 

I am amazed to see such huge names here.


Sachin


0 Votes

Sam -


Perhaps the other analyst you link to thinks EMC is going to fold VMware back in. But because EMC owns 98% voting control of VMware, I don't see it going anywhere.


Other than that, every software supplier other than the big four (IBM, Microsoft, Oracle and SAP) is likely to get gobbled up (I'd add BMC to this list) and even SAP is a target.


But I have a problem with calling Sun and Novell "open source companies." Just because they made some fairly minor acquisitions (relative to their sizes) and adopted open source as a marketing technique late in their corporate existence as a final gasp at saving themselves, it is not fair to link them to the open source movement and culture.


Thanks


Dennis


0 Votes

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