VCs' Open Source Attraction
he open source market is decidely hot right now, from software to support and services. Recently, venture capital firms have upped the ante, investing millions in open source-focused companies with the hopes of cashing in like JBoss did, when Red Hat (Nasdaq: RHAT) scooped it up for a tidy US$350 million in June.
"Compared to two years ago, I would say [VC interest in open source firms] is probably up 200 percent to 300 percent," said Pradeep Tagare, investment manager of open source investments at Intel Capital, the investment arm of Intel (Nasdaq: INTC).
Bernard Dalle, general partner with Index Ventures, agreed. He too is seeing roughly two to three times more investment in open source companies this year than he did last year, he told LinuxInsider. "The reason for that is, a lot of the startups recognize the fact that it's difficult to get into the software business if you don't have an open source [component] to your story," he said, comparing that to a few years ago, when the reflex was to keep code proprietary.