The news that VMware is to buy tools and application framework developer SpringSource is generating a fair amount of heat in that part of the blogosphere not obsessing over Facebook's deal to grab FriendFeed.
The enterprise end of IT doesn't usually get its fair share of attention but VMware-SpringSource is interesting for a number of reasons:
(1) VMWare is itself still hot. Maybe not as hot as when its IPO saw the company become the second biggest business software asset in Silicon Valley after Oracle by market cap, but nevertheless hot and arguably the most disruptive force since Larry Ellison's boys wondered whether presenting data in tabular, relational form might catch on.
(2) SpringSource is hot. It may not be operating in a space that catches the attention in the way that operating systems and databases do, but SpringSource is lauded as an elegant, fast-growing company that can play a major part in cloud computing.
(3) How much? Even for a generation that yawns over mega-deals, the price tag of $420m is still sizeable for an early-stage company.
(4) The landscape just moved -- again. With VMware adding SpringSource, it has arguably added a significant component to its plans to cover cloud computing, thus putting pressure on rivals, including Microsoft, IBM and, as Matt Asay notes, Red Hat.
All very good but I'm still not convinced that this deal will be a winner because...
(5) This is another closed-shop/open-source combination.
We should all be used to seeing open-source companies acquired by now but what is interesting is how many of the bigger deals have been problematic. Look at Novell-Suse where Suse founder Hubert Mantel left within two years of Novell picking up the German Linux distro, reportedly saying "This is no longer the company I founded 13 years ago". Or at Sun-MySQL where former MySQL CEO Marten Mickos left a year after Sun agreed to buy the database outfit, saying that he loved "the challenge of an unproven value proposition ... being the top policymaker."
Of course, all combinations run the risk of causing upset, collaterlal damage to ego and general disruption. Ask anybody who survived Compaq-Digital for their sagas surrounding not just salaries and bonuses but also parking spaces and office size, or look at VMware itself and its radically diferent management team since taking the EMC shilling.
That said, I think open-source companies may be particularly susceptible to disruption. They are built in part on goodwill (if not perhaps quite the levels of altruism that some would ascribe) and sensitive communities and networks of people. They typically have very small revenue streams, nothing or little in the way of profit, and they tend to be growing very quickly. They are often led by people who have not been through the usual enterprise software shark pool and are driven by the product and changes they can make. Becoming part of a company many times larger that is bound by the controls of public markets and rapacious demands of shareholders is a very different environment.
Even where the buyer is itself an open-source concern, as in Red Hat's acquisition of JBoss -- after which, JBoss CEO Marc Fleury left in short order -- the potential for clashes in terms of operating model and style of leadership means that there will surely be bumps on the road.
It's still pretty early days for open-source rockets to find their ultimate destination but I do believe they might be particularly prone to the extreme volatility of acquisition. It will be interesting in a few years to gauge how many such deals can be deemed successes with any degree of confidence -- especially if a key metric of success is not just getting rid of a pesky startup rival.