Just five years ago, most investors did not believe that open-source software could be a real business. They thought Red Hat was the only company that would ever succeed. But today, the world has changed completely.
Big companies are paying huge amounts of money for open-source businesses. IBM is buying Red Hat for $32 billion. MuleSoft was bought for $6.5 billion. MongoDB is now worth over $4 billion. Elastic is valued at $6 billion after its IPO. Cloudera and Hortonworks are merging to create a company worth more than $4 billion.
So what happened? How did open-source go from a small idea to the hot place to be in software?
The first open-source projects were not about making money. Developers were angry about high prices from companies like Microsoft and Oracle. They wanted to build better software that everyone could use for free. They started with operating systems and databases. Linux and MySQL became very popular because they were strong and flexible.
The first open-source businesses sold support services. Red Hat became the winner with Linux, and MySQL did well with databases. Even though it was hard to make money with just support, the market was so big that these companies grew large.
Now we are seeing a third generation of open-source companies. These new businesses are smarter about making money. Companies like Elastic, Mongo, and Confluent offer their software as a cloud service. This means customers can use the software easily without worrying about licenses.
The future looks very bright. Open-source is no longer a strange idea. It is becoming the normal way to build software. In the coming years, we will likely see many more billion-dollar companies born from this movement.
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