Archive for November, 2010
When we did press interviews for our recent corporate announcement (the acquisition of Sopera and a $34m funding round), we had – as usual – side discussions with the journalists on the general shape of the open source market. In London, Jason Stamper from CBR asked me what I thought of a comment by SAS Institute CEO Dr Jim Goodnight, saying that he “Hasn’t noticed [open source BI] a lot,” and that, “most of our companies need industrial strength software that has been tested, put through every possible scenario or failure to make sure everything works correctly.”
I did reply pretty bluntly – pardon my French – that is was all PR bullshit, that of course SAS was noticing open source, that they would just refuse to admit it publicly. And I went on ranting on the benefits of the open source model for software quality. And Jason, a great journalist, seized the opportunity to quote me verbatim (I am not going to pretend I blushed, these who know me wouldn’t believe it anyway).
I was very disappointed by responses from my colleagues from other leading open source vendors, who made much more conventional assertions, like saying that Goodnight did not notice open source because he did not get in the field, did not speak to his reps, etc. Essentially, that open source was still flying under the radar.
Get real, guys! Open source is no longer under the radar of proprietary vendors. We are right in their face, up their… (OK, I’ll stop here, enough French in this post). They are losing deals to us, day in and day out. Their reps are equipped with competitive materials that only the largest vendors have the resources to produce (and since we are open source, they don’t even have to hack licenses or bribe clients to do so). And when these reps interview with us, they come with advanced knowledge of our offerings, and many anecdotes of deals they’ve lost to us (which is usually why they send their resume).
Recently, an analyst told me Informatica was arguing that “from the technology standpoint, Talend is where Informatica was 15 years ago.” Well, Mr (or Ms) Informatica AR Person, I can see 2 options: #1 you believe your own BS, or #2 you are under strict corporate orders to be dismissive of open source. And, malicious that I am, I believe it’s #2…
The fact is, Informatica is losing business to Talend. Business Objects is losing business to Jaspersoft. Lombardi is looing business to Bonitasoft. Oracle is losing business to Infobright. TIBCO is losing business to Sopera (now to Talend). Siebel is losing business to SugarCRM. And the list goes on…
They know it, they track it. But they won’t admit it. To paraphrase Jane Austen: pride, or prejudice?
Yves
PS: an afterthought – there is actually still one radar that does not notice open source. Maybe that’s because it’s actually only one quarter of a radar…
In a release issued yesterday, Attachmate announced that it plans to buy Novell for $2.2b. This is significant for Talend, and for everyone involved in commercial open source, because Novell is one of the largest open source vendors with its SuSE product line.
This deal represents a 50% premium over Novell’s valuation at the beginning of this year. Of course, speculation about a takeover did fuel Novell’s share price, but how much of Novell’s valuation comes from open source? Many speculated that Sun’s hefty $7b price tag was in great part due to its $1b MySQL acquisition (a nice ROI…). In this case, would Novell be valued so much if all it had to sell were NetWare and GroupWise? (not exactly cutting edge technology)
This acquisition does not make a lot of sense for Attachmate – no one sees any product or market synergy in this deal – but it does make sense for Attachmate’s investors, Francisco Partners, Golden Gate Capital and Thoma Bravo who are getting their hands on a golden nugget – a leading open source product, well deployed and with deep open source know-how. Open source is the next generation model for producing software, and Attachmate’s investors understand that. By acquiring Novell, they are buying their ticket into this market, and certainly intend to leverage this opportunity beyond just SuSE.
The ironic component of this deal is Microsoft’s involvement. After fighting open source for many years, Microsoft is now embracing it. Which Novell patents is Microsoft getting as part of the deal? Nobody knows rights now. It will be interesting to see how much they contribute to Microsoft’s open source strategy.
At the end of the day, this acquisition is good news. It proves one more time that open source creates opportunities for investment, and that open source vendors can thrive, grow, and play on the enterprise scene.
Bertrand
Last week, Talend announced that it had completed a round of financing for $34 million. This round was led by Silver Lake Sumeru, one of the most visible and largest investment firms in the IT sector the US. To put things in perspective, Silver Lake Partners, the parent company, was the leading force in Skype’s buyout from eBay ($1.2b). Silver Lake manages $15 billion in assets.
Why did Silver Lake invest into Talend? It’s simple: because we have proven our ability to deliver, consistently, and to contribute to a market shift. Looks at where the data integration market was 5 years ago, and where it is today. I am pretty proud of what we have contributed to: democratization of the market. Silver Lake trusts that we will be able to apply the same model to similar markets – and application integration is one of them.
What will we do with these $34m? Part of it has been used to acquire Sopera. Another part will be used to invest heavily in the deployment of our new application integration division. And then… for further acquisitions!
Why did we choose Silver Lake as a financial partner? Because they have a vision for Talend, and we are aligned with this vision. They want to help us become a global player in the open source space. The Sopera acquisition already puts us in a good spot – we are today one of the top five open source vendors. But we won’t stop here.
Bertrand
 Last week, we announced that Talend had acquired Sopera, the leading open source ESB provider. This acquisition marks an important milestone in the growth of Talend: from a pure play data management vendor, we are now growing into adjacent markets and taking the company to the next step.
First, Sopera’s application integration technology is a perfect complement to Talend’s existing technology stack. Not only are they both based on the same Eclipse environment, but they also leverage the same open standards. And of course, they are both open source.
Second, the application integration and the data management markets are very close and are converging. Most industry analysts agree that these technologies are meant to be used together in IT organizations. And we have numerous proof points of this happening already, thanks to the joint customers that Talend and Sopera were sharing through their existing partnership.
Third, everyone knows that in enterprise M&A, 1+1 never equals 2. In our case, we will prove that 1+1=3, 4, maybe even 5! How? By leveraging all our technology stack. We are in a unique position to deliver a complete, integrated middleware solution. It would be like combining Informatica and Tibco, or making Oracle’s serial acquisitions actually work together – but in an open mode, with the customer’s best interests in mind (unlikely in the case of these proprietary vendors).
What’s next? In a couple weeks, we’ll be announcing the roadmap of our new application integration division. Stay tuned!
Fabrice
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