According to Matt Asay, of CNET.com, Open Source will become a $22 billion industry by 2010. And if you include all the inhouse work that firms do with open source platforms, you can add an additional $19 billion, making the total industry a $41 billion industry. Overall, this means that up to 20% of software sold in 2010 will be based on an open source platform. Wow. Does Microsoft need to start being worried?
Gartner Research estimates that Desktop distribution growth of Linux will plateau by the end of the 2007 and its growth rate will remain constant through 2010. They claim that the real growth will come in databases/middleware applications, as many firms are developing new products on open source platforms (such as IBM).
Software Proprietary Developers and Vendors may need to watch out, as there seems to be a sectoral shift in the industry towards OpenSource.
Showing posts with label Google growth. Show all posts
Showing posts with label Google growth. Show all posts
Sunday, October 28, 2007
Saturday, October 20, 2007
Is M&A the only way to Win?
In a brief Q&A at the Web 20. Summit Yesterday, Steve Ballmer said that Microsoft would be willing to acquire up to a 100 companies in the next five years. That' would spell out to be a spiraling acquisition game, which could wreak havoc on its financials. But more importantly, how does this fit in with the industry?
Microsoft has been the behemoth in the industry for the past 20 years, but many analysts point to a stagnant stock price and unpopular news media to make the claim that Microsoft may have matured. Compare Microsoft with Google, who's stock price has increased nearly 500% since it's Initial Public Offering in 2004. One way to compare the companies may be to look at sheer size alone, with the time-tested Microsoft boasting a market cap of $283 billion, and infant Google passing the $200 billion market cap mark just a few days ago. Do you think Google is big yet? Well, dig a little deeper and look at the number 3 and 4 search engines Yahoo and Baidu, who boast much smaller market caps of $38 billion and $10 billion, respectively. Most analysts are bullish on Google, while remaining neutral to the industry.
Some may ask how Google has grown so big? One way to answer this question may be to look at Google's acquisitions. Google has done a good job of acquiring horizontally related software development companies, acquiring more than 40 companies since 2001. This works out to approximately 7 companies a year. These companies have added significantly to Google's product line, including Youtube, Docs & SpreadSheets, Maps, and more. Maybe Microsoft sees small, innovative companies as the best method of increasing research and development? It does seem that way, especially if Ballmer wants to acquire 20 companies a year for the next five years. I predict that we will see higher P/E ratios indicating higher expectations for MSFT.
The real test will be if Ballmer can pick the right companies. Acquiring companies requires a lot of thoughtful planning, and acquisitions only work if the acquired company fits into the bigger picture of the acquiring company's strategy. Let's see how Ballmer does.
Link to Article:
http://blog.wired.com/business/2007/10/microsoft-wants.html
Microsoft has been the behemoth in the industry for the past 20 years, but many analysts point to a stagnant stock price and unpopular news media to make the claim that Microsoft may have matured. Compare Microsoft with Google, who's stock price has increased nearly 500% since it's Initial Public Offering in 2004. One way to compare the companies may be to look at sheer size alone, with the time-tested Microsoft boasting a market cap of $283 billion, and infant Google passing the $200 billion market cap mark just a few days ago. Do you think Google is big yet? Well, dig a little deeper and look at the number 3 and 4 search engines Yahoo and Baidu, who boast much smaller market caps of $38 billion and $10 billion, respectively. Most analysts are bullish on Google, while remaining neutral to the industry.
Some may ask how Google has grown so big? One way to answer this question may be to look at Google's acquisitions. Google has done a good job of acquiring horizontally related software development companies, acquiring more than 40 companies since 2001. This works out to approximately 7 companies a year. These companies have added significantly to Google's product line, including Youtube, Docs & SpreadSheets, Maps, and more. Maybe Microsoft sees small, innovative companies as the best method of increasing research and development? It does seem that way, especially if Ballmer wants to acquire 20 companies a year for the next five years. I predict that we will see higher P/E ratios indicating higher expectations for MSFT.
The real test will be if Ballmer can pick the right companies. Acquiring companies requires a lot of thoughtful planning, and acquisitions only work if the acquired company fits into the bigger picture of the acquiring company's strategy. Let's see how Ballmer does.
Link to Article:
http://blog.wired.com/business/2007/10/microsoft-wants.html
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