Friday, January 16, 2009

Opportunities for open source M&A in 2009

Report from the 451 group on M&A opportunities for open-source sector.

Why open-source could be an attractive target:

The 451 Group's assessment of overall M&A potential in 2009 noted that 'transformative deals' are the least-likely transactions to get inked this year and that there is expected to be an acceleration of 'bolt-on' acquisitions, which are typically low-risk deals that allow companies to sell technology developed by a startup into their existing customer base. Therefore, open source software vendors are likely to be attractive targets, especially if the prediction that current economic conditions will increase the adoption of open source proves to be correct.

The expectation is not that customers will divert funds previously allocated to proprietary projects toward open source software but that significant project spending will be delayed while open source becomes even more attractive for smaller, skunkworks-style projects.