VMware's SpringSource Acquisition Aims it Up and Down the Software Stack
by Sam Dean - Aug. 11, 2009Comments (2)- Related Blog Posts
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As everyone digests the big news that VMware intends to buy SpringSource for $420 million--its biggest acquisition ever--I'm inclined to think that the move primarily represents a dedicated step from VMware away from just being a virtualization player. As we've discussed before, VMware has been tightly squeezed by competition from open source and free, bundled virtualization software offerings. Its relatively new CEO Paul Maritz (who was a long time Microsoft executive), knows what it is for proprietary platforms to face free, open source competition, and SpringSource can help VMware compete very directly with Red Hat, particularly in the application server market.
Still, along with Oracle's acquisition of Sun Microsystems, the move from VMware provides yet another example of a smaller company that has retained a strong focus on open source being acquired by a much larger, proprietary competitor. Just before last year ended, we predicted that open source mergers and acquisitions would increase dramatically this year, but who would have thought that we would see such huge acquisitions? What are the implications for VMware, Red Hat, and open source?
I agree with Matt Asay that VMware's proposed acquisition of SpringSource puts the squeeze on Red Hat, especially in the application server and enterprise software development markets. SpringSource has retained a major focus on tools for Java developers, and on open source, and can help VMware compete directly with Red Hat's JBoss business and cloud initiatives. And I very much agree with this thought from Asay:
"First, with every acquisition of a leading open-source company by anyone other than Red Hat, Red Hat becomes more and more isolated. Other companies are integrating open source into their business strategies. Red Hat's differentiation as 'the' open source company doesn't have much of a shelf life left."
SpringSource has steadily focused on developers, but also on moving its tools deeper and deeper into enterprise software stacks, as evidenced by its acquisition of Hyperic--which provides open source monitoring and troubleshooting tools--in May. With VMware's virtualization, SpringSource's strengths in development tools, application servers,and more, plus Hyperic's monitoring tools, VMware gets closer to the kind of end-to-end enterprise software stack solutions that Red Hat has focused on.
In fact, VMware CEO Paul Maritz, who was at Microsoft during the rise of Windows, is quoted in the New York Times as saying: "The role of the traditional operating system is changing. Down the road, this will help transform VMware into being much more than it is today."
The SpringSource acquisition is a platform play from VMware, emphasizing enterprise software stacks, software development, scalable environments in data centers, and virtualization for making data centers easily fluent with multiple operating systems and environments. It's also evidence that VMware is paying more attention to open source competition (it is a member of The Linux Foundation).
Red Hat should take a close look at how it will differentiate its similar efforts from VMware's, and the open source community overall should definitely take note of the fact that some of the primary standalone commercial open source companies are being swallowed up by big proprietary players.
