O’Reilly.net: The Strange Case of the Disappearing Open Source Vendors

“Back in 1998 when the term ‘open source’ was coined, the story
was simple: ‘Just because there’s no vendor behind software, it
doesn’t mean it isn’t important. The Internet runs on open source
software (BIND, Sendmail, Apache, Perl), so any enterprise that
depends on the Internet also depends on open source.’ As in the
Sherlock Holmes story, Silver Blaze, the ‘curious
incident’ was the absence of the expected. The press, the analysts,
and the computer industry as a whole ignored open source software
because no one was paying for it. An industry whose measurements
were focused on vendor market share had no way to come to grips
with a market segment in which software could be adopted by end
users without money changing hands.

“But like the misdirection that often characterizes mystery
stories, the first and most obvious conclusion may lead the
investigation astray. Many people rushed to the conclusion that the
answer was to monetize this market segment! Over the next few
years, open source boomed along with the Internet, and we saw a
huge influx of venture capital (especially into Linux) and several
multibillion-dollar IPOs.

“In the summer of 2002, though, the story is much more sober.
The dot-com boom has ended, the VCs and the stock market are in
retreat, and of all the much-hyped open source companies, only a
few are left. Red Hat is still flourishing, but VA Linux Systems
has taken ‘Linux’ out of its name; Caldera, SuSe, Turbolinux, and
Connectiva [sic] are joining forces; Eazel, Great Bridge,
and Lutris are out of business, among many others. (Note: In
addition to Red Hat, there are some quiet successes: Zope,
ActiveState, and CollabNet all have continued solid growth.
Disclaimer ((or should it be bragging rights?)): O’Reilly is an
investor in all three.)…”

Complete
Story