By most accounts, including that of fellow open source ERP player xTuple CEO Ned Lilly, who offers an interesting and accurate depiction of Compiere’s changes, acknowledge the movement away from community that occurred over the last few years at Compiere. As discussed in our own recent report on the deal, we are also somewhat skeptical over the fate of what is left of Compiere’s open source community, even though Consona plans to continue offering both paid and free versions. At the same time, we are also wondering whether it will matter much — to Consona, to Compiere or even to its customers?

So how does this jibe, or not, with our views on how M&A deals and valuations involving open source software vendors tend to highlight the value of open source communities?

Community has served to drive up the price in deals stretching back for years (Citrix-XenSource for $500m, August 2007; Nokia-Trolltech at $153m, January 2008; Sun-MySQL for $1 billion, January 2008; VMware-SpringSource $420m, August 2009), but the reality in the case of Consona-Compiere (price not disclosed) is that community, or lack of a vibrant open source software community, may have actually driven the price down.

We must also consider the significance of cloud computing here. Cloud capabilities and possibilities in the enterprise version of Compiere’s platform may have trumped community in this case, but the deal still serves to remind open source software companies, as well as their existing and potential partners and acquirers, that community counts.

I attended a panel session at the South by Southwest Interactive conference recently on the topic of high-tech startups in Europe.  The panel included Marten Mickos (former CEO of MySQL, now at Eucalyptus), Resham Sohoni (CEO of Seedcamp), Peter Robinett (Bubble Foundry) and Felix Petersen (Nokia).  It was interesting to learn about some of the initiatives, like Seedcamp, which are investing in and promoting startup companies like Erply, and Codility coming out of eastern europe. These companies are small, but they have big ambition and are leveraging open source and cloud infrastructures to keep their costs low.

Here's some video from the panel...

*Jacobsen v. Katzer and open source impact
*Intel, Nokia team up for MeeGo open source OS
*Open source continues in embedded space
*MongoDB and the advent of the NoSQL databases
*Copyrights, complexities, control and conflict

iTunes or direct download (21:48, 6.07 MB)

What would it mean to carve out the open source projects, components, teams and support from companies involved in mergers and acquisitions over the last few years?

Would Citrix have still bought XenSource if Xen were cut out or somehow separated in any way shape or form from the deal? Would it have paid $500m?

Would Nokia have bought Trolltech and Qt for $153m?

More recently, would VMware have purchsed SpringSource for $420m if some or any of SpringSource’s open source projects, developers or holdings — including its own acquisitions Covalent and Hyperic — were not included?

Oh yeah, would we even be here with MySQL owned by Sun Microsystems if Sun were prevented from fully acquiring the project, code and company despite spending $1 billion two years ago?

Some degree of concern about Oracle’s potential ownership of MySQL or any ownership of open source projects and code is certainly warrented and prudent, but I don’t believe the fear that punctuates the message of the ‘Save MySQL’ campaign makes much sense. This is particularly so in light of the past deals listed here and others where the market has required continued investment and support of open source and provided continued revenue and benefits from open source.

While some of these scenarios may be admittedly implausible, I believe that separating out open source components, parts, projects and subsidiaries from vendors could certainly serve to dull the shine of open source software assets and vendors amid M&A valuations, prospects and strategy.