Enterprise Open Source is Booming

VC's pouring more money in, record setting financials and analyst acclaim validate that open source is finding an eager market in the enterprise

Amid indicators of an improving macro economic picture are glimpses that the open source market has not only survived the great recession, but in fact is emerging stronger than ever. Especially in servicing the enterprise market, several open source business model companies have recently announced some really positive news recently.

First MuleSoft, makers of open source middle ware announced that they have just raised another 12 million dollars in a level C round. In the present money raising market, this is no small feat. MuleSoft has raised nearly 30 million dollars now from some very blue chip Silicon Valley investors. They claim 5 out of the top 10 banks in the world as their customers, 2,500 deployments and over 1.5 million downloads.

These are impressive numbers in a very desirable market. MuleSoft is however not profitable at this point evidently. They will need to reach that level though to really take it to the next step. Nevertheless, these are impressive accomplishments for any company, whether they are an open source company or not.

Alfresco is another open source based company that seems to be hitting it out of the park. The London based developer of open source ECM (enterprise content management) just announced a record breaking year and their best quarter ever. Normally I shun private companies putting our releases like this without specific numbers. Taking them at face value though, they have added 300 customers this year and 61% revenue growth. Again, numbers to be proud of.

An interesting point about both Alfresco and MuleSoft is that they claim much of their revenue comes from subscriptions. So it is not just the "support model" for commercial open source. They are selling services, expanding channels, doing all of the things that any enterprise software company should be to be successful.

Of course this is on the heels of another solid quarter and year by Red Hat. Add this to the post I did on MindTouch last week (I will have more news on MindTouch tomorrow) and a picture begins to emerge that open source software providers to the enterprise have come out of the recession poised to dominate.

The old questions about the validity of the business model and whether enterprise class customers would adopt open source solutions seemed to have fallen by the wayside. It also would indicate that what we are seeing in the enterprise will trickle down from their to the mid-market as well.

Yes indeed, the picture seems rosy at the moment for open source software makers. Of course that doesn't mean every single open source company will succeed. Like in any market there will be some winners and probably many more losers. But it is clear that you can succeed with an open source business model

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