OStatic

This post from ZDNet and this one from Matt Asay provide some good angles on the momentous changes we've seen on the open source front this week. The fallout and immense industry changes that we're likely to see as Oracle digests Sun Microsystems are staggering to consider. As Dana Blankenhorn says, Oracle is going to control three crown jewels of open source in the form of Java, OpenOffice, and MySQL--among the most widely used projects and among those with the largest developer communities outside Linux itself. Meanwhile Matt points out that only Red Hat is thriving as a public, pure open source company, which I would agree with. So what has Red Hat done right?

In a swimmingly good day for the stock market yesterday, shares in Red Hat rose a whopping 10 percent, on speculation that Oracle may buy the company. The flight of fancy began with comments from Jeffries & Co. analyst Katherine Egbert, covered by Barron's. Reuters picked up on the rumor, but Steven J. Vaughan-Nichols is having none of it, and Matt Asay points out that this exact rumor is seasonal. I doubt if Oracle is after Red Hat, but I'm not as sure as Vaughan-Nichols that an acquisition wouldn't make sense for Oracle.

At the end of last year, I made the prediction that we'll see substantially more mergers and acquisitions on the open source front this year. Researchers at the 451 Group have also made that prediction, and provided some good data to back it up.
? When I wrote about the topic, I concentrated mainly on the low market capitalizations for public open source companies and how the valuations make them acquisition targets. Now, there are signs appearing that at least one of the big, public open source companies may in fact go on the acquisition hunt itself. As PCWorld reports, Novell's president and CEO Ron Hovsepian confirmed in India today that Novell is looking for acquisitions to fill out its product line.

Reports came in from the blogsphere earlier this morning concerning layoffs at Novell. The news immediately follows Sun Microsystems' announcement that it is laying off about 18 percent of its employees, which leaves only Red Hat as the major public open source company not to announce layoffs. Matt Asay got the skinny from Novell officials, and apparently the layoffs affect fewer than 100 people. (This post was updated after earlier reports that the layoffs affected many more people.)

Matt Asay notes a milestone today: Red Hat is just about to surpass Sun Microsystems in market capitalization. At the moment, Sun's market capitalization is $2.69 billion and Red Hat's is $2.61. If the trends in share prices for these two companies continue, Red Hat's market cap will soar right past Sun's. Does this make any sense?

As the final days of 2008 drew to a close and predictions about open source in 2009 began to spread around the web, I predicted that this year will bring many more mergers and acquisitions among commercial open source companies. I based this primarily on extremely low valuations. So far I haven't been proven right, but researchers at The 451 Group are backing the concept up. Interestingly, two of the public open source companies that I mentioned as possible acquisition targets--Red Hat and Sun--are seen as potential acquirers in The 451 Group report. Here are some thoughts on their report and some notable data from them.

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?

Today there are quite a lot of lists of predictions for 2009 appearing. This list of 10 predictions for Linux has some ideas that I agree with, including bright futures for embedded Linux, virtualization, Linux-based gadgets and more. (I'm not so sure Linux-based game consoles have a bright future.) It's the first prediction on the list, though, that I think will have a big impact on open source next year: More buyouts and mergers. We are in a business environment right now where people are lulled into believing that very abnormal things are normal. The unwinding of this will be a huge 2009 story in open source and in the technology industry overall.

Red Hat reported its third quarter earnings after the close of the stock market today, and the news was rosy, especially given these economic times. The earnings were up nearly 20 percent, although the company did have to contend with unfavorable exchange rates. For the quarter ended November 30th, net income was $24.3 million or 12 cents per share, compared to $20.3 million, or 10 cents per share for last year's third quarter. Revenue grew 22 percent year-over-year to $165.3 million. The profit? performance also topped analysts' expectations. Here are some of the details and what this means.