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Nine open companies

From pure open source firms to traditional IT companies,
all tech players benefit from open source software.
We feature some of the best.


The king of big data

  • Foundation: 2008
  • Headquarter: Palo Alto (US)
  • Revenues: $479.9 M (2018)
  • Effectives: 3'000

It was a major transaction in the US open source world. In early October 2018, Cloudera and Hortonworks announced their merger, which should be finalised in Q1 2019. The merger ends the battle between these two direct competitors for providing solutions that can analyse colossal amounts of data. Cloudera and Hortonworks both offer versions of Hadoop, an open source software managed by the Apache foundation that has become a standard in the big data universe. In addition to its free version, Cloudera also sells paid extensions to manage launches, configurations and security.

After the merger, the new company will still have a direct rival: US-based MapR. It is also up against cloud mastodons (Amazon, Microsoft and Google primarily) which also have solutions similar to Hadoop. The new entity generated approximately $760 million in revenue (Q3 2018), with more than 2,500 clients. It is hoping to save $125 million per year in synergies. Is that enough to compete with its rivals? Everyone is asking the same question, especially as the two companies have significant operating losses ($78 million for Cloudera, $55 million for Hortonworks).


The super search engine

  • Foundation: 2012
  • Headquarter: Amsterdam (NL)
  • Revenues: $160 M (2018)
  • Effectives: 1'100

It was the early 2000s in London. Shay Banon, then unemployed, spent his free time developing a search engine to help his wife organise her impressive list of digital recipes. He created Elasticsearch for her and published the code in open source. The developer community loved it and downloads were off the charts.

Banon decided to co-found Elastic in 2012 to develop an open software suite around Elasticsearch. The system is able to find the most relevant information from a gigantic mass of data spread across thousands of servers. For example, Elasticsearch can find the two most suitable Tinder profiles and match them, or give an Uber driver the most efficient route for a client.

Besides Tinder and Uber, Elastic has other big name clients such as Netflix, Cisco, NASA and the New York Times. While Elastic’s software suite, which includes Elasticsearch, Logstash, Beats and Kibana, remains entirely open source, the company sells additional paid modules under a proprietary licence. These, along with revenue from technical support and services, are the company’s sources of income.

Since its creation in 2012, Elastic products have been downloaded more than 350 million times. But this success hasn’t yet made it to the company’s bottom line. Listed on the New York Stock Exchange since October 2018, Elastic isn’t making a profit yet. During financial year 2018, the company recorded a loss of $52.7 million for a revenue of $160 million (+80% over one year). Elastic is up against the proprietary solutions of competitors such as Amazon, Google and Splunk. Most analysts recommend purchasing shares, with a target of $95 per share in three months, compared to $82 at the end of March.


Tempted to restrict access

  • Foundation: 1998
  • Headquarter: Mountain View (US)
  • Revenues: $136.82 BN (2018)
  • Effectives: 99'000

Google’s experience with open source software is a bit similar to Dr Jekyll and Mr Hyde. On one hand, the Mountain View group exists today in large part because of open source software, such as Linux or MySQL. It built its empire on these tools (in fact, Alphabet, Google’s parent company, widely contributes to many open source projects). On the other hand, Google keeps its sensitive products under proprietary licences.

For example, Android, the operating system used in nearly 80% of smartphones around the world, is entirely open source. But the available source code doesn’t include the company’s flagship products like Google Maps, Gmail and Google Play, which are all under a proprietary licence. Without these products, Android’s potential would be significantly limited. Furthermore, most telephones use proprietary forks from Android that are modified by the builders.

“Google changed its approach,” said Pierre-Yves Gosset, head of the Framasoft association. “It went from being an outsider that kept its software as open as possible to being a dominant player that’s trying to restrict access.”


The (almost) 180° shift

  • Foundation: 1975
  • Headquarter: Redmond (US)
  • Revenues: $110 BN (2018)
  • Effectives: 135'000

Proprietary software giant Microsoft isn’t yet ready to make its flagship products, such as the Windows OS, open source. But it would be an understatement to say that the Redmond company has made a radical change to its procedures under Satya Nadella, CEO since 2014. The company was strongly opposed to open source software under Steve Ballmer, CEO of Microsoft between 2000 and 2014, but has since done an about-turn to become the top open source contributor on GitHub, ahead of Red Hat and Google. Before joining Microsoft, Satya Nadella worked for Sun Microsystems, one of the pioneers of open source.

In June 2018, Microsoft acquired the main free software forge GitHub for $7.5 billion. This platform, an essential resource for developers around the world who freely exchange lines of code, contributes to the development of open source software. GitHub has nearly 28 million developers that work collaboratively on more than 60 million open source projects. With this acquisition, Microsoft became a key player in the industry.

But it remains to be seen if it will clean up GitHub. In fact, many lines of code on the platform conflict with its own commercial interests.

One example: several Xbox gaming console emulators are hosted on GitHub. These homemade programs allow users to play Xbox games on their PC without purchasing the console sold by... Microsoft. If the US giant removes these conflicts, the developer community could leave and join another software forge, such as GitLab. But letting these developers go would be against Microsoft’s best interests. It will be an interesting dilemma to follow. 


A cold snap for databases

  • Foundation: 2007
  • Headquarter: New York (US)
  • Revenues: $267 M (2018)
  • Effectives: 1'000

Business was booming. In 2018, shares of MongoDB went up by more than 240%. This enthusiasm from investors demonstrates the company’s revenue growth – turnover was up nearly 75% in 2018 compared to the previous year and MongoDB products had very strong potential. The company, listed on the Nasdaq, distributes the very popular open-source database MongoDB, which was downloaded more than 40 million times since the company started. MongoDB’s clients include big names such as Adobe, Amazon, AstraZeneca and eBay.

Until recently, MongoDB generated revenue from its paid services that accompany the database. But tired of seeing many firms like Amazon offering their clients the NoSQL database without paying MongoDB, the company decided to revisit its business model. On 16 October 2018, it established a new licensing system to protect itself from “big cloud providers that want to capture all the value without giving anything back to the community.”

Companies providing public access to a service using the software will now be required to make public the entire code used to operate the software, including user interfaces, backup software, etc. Following this decision, Red Hat announced in November to remove MongoDB from programs on the next version of its operating system and the Open Source Initiative (OSI), the industry’s umbrella organisation, stated that “MongoDB was published under a non-approved licence and therefore was no longer an open source software.” It was a critical blow to the company: if the developer community turns its back on MongoDB, a fork (a new software created from the free code) could be created and become a competitor for the database. With this in mind, analysts are split: half advise purchasing shares whereas the other half recommend holding.


Prince of darkness

  • Foundation: 1977
  • Headquarter: Redwood (US)
  • Revenues: $39.83 BN (2018)
  • Effectives: 137'000

“If an open source product becomes sufficiently good, we take it, simple as that. For example, we went after the Apache software when it became better than our own service. The big advantage of open source is that no one really owns it – a company like Oracle can take it for free, include it in one of its own products and charge for support, and that’s what we will do.” In a 2006 interview with the Financial Times, Larry Ellison, co-founder of Oracle, summed up Oracle’s open source strategy in just a few sentences: use open source to generate as much cash as possible.

In 2010, the US giant acquired Sun Microsystems, an older company known for its many open source projects, for $7.4 billion.

Then Oracle acquired the Solaris operating system, as well as OpenOffice, the MySQL database and the programming language Java. Most of its portfolio went under a proprietary licence just after the acquisition of Sun Microsystems, except for MySQL: Oracle decided to develop two versions, one open source and the other proprietary.

Fleeing this upheaval, Solaris employees created a fork called Illuminos and OpenOffice engineers created LibreOffice. While Oracle also contributes to Linux, it has a very bad reputation in the open source world. Larry Ellison, whose fortune was estimated at $52.2 billion by Forbes Magazine in 2017, is nicknamed LPOD: Larry, Prince of Darkness.

Red Hat

The global leader

  • Foundation: 1993
  • Headquarter: Raleigh (US)
  • Revenues: $2.9 BN (2018)
  • Effectives: 12'600

Legend has it that Red Hat got its name from one of its founders, Marc Ewing, who often wore a red hat at university. Twenty-five years later, the company has become a major player in the IT world. As proof: IBM paid $34 billion to acquire Red Hat in October 2018, one of the most expensive acquisitions ever made in the industry.

Little known to the general public, Red Hat specialises in developing and distributing open source software, particularly its own version of the famous Linux operating system, an open source competitor to proprietary solutions such as Windows (Microsoft). Red Hat is growing quickly and revenue increased year over year, reaching $2.9 billion in 2018, up 21% compared to 2017 for a total of $472 billion in profits.

Comparatively, the older IT player IBM has been on the decline for several years. With this acquisition, IBM hopes to reverse the trend and strengthen its cloud services. It remains to be seen if a partnership between a traditional company and a young innovative start-up will be successful.


The data processor

  • Foundation: 2005
  • Headquarter: Redwood (US)
  • Revenues: $204 M (2018)
  • Effectives: 1'000

Virtually unknown by the general public, the French start-up Talend is now an important company in Silicon Valley. Listed on the Nasdaq since 2016, the company left Suresnes in Île-de-France and moved to Redwood, California, a city that is more fitting for its international ambitions. But its original mission hasn’t changed: it seeks to homogenise and process data for better analysis. With the rise in big data, many companies receive huge amounts of data on their clients or suppliers. Talend’s tools, which are distributed via open source, allow for a company’s data to be used more easily in order to maximise its benefits.

Like Red Hat, the company generates revenue from the paid versions of its software that include additional functionalities, support, training and assistance using the tools. Talend’s clients include Air France-KLM, Bayer Pharmaceuticals and Domino’s Pizza. Most analysts recommend purchasing shares, which dropped in late 2018 but are starting to pick up again.


The goldsmith of cybersecurity

  • Foundation: 2003
  • Headquarter: Paris (FR)
  • Revenues: € 12.6 M (2018)
  • Effectives: 100

In March 2018, French company Wallix won the “2017 Bossie: The Best of Open Source Software Award” for its Awless CLI application. This award, given by benchmark magazine Infoworld, recognises the best open source solutions in the world. Launched in February 2017, Awless CLI is a command line interface for steering tasks in Amazon Web Services (AWS) that also strengthens the infrastructures’ security and administration.

Founded in 2003 in Paris, Wallix develops cybersecurity software and specialises in managing and protecting “privileged” access. In other words, when a company processes sensitive data, some of which is shared in the cloud with external providers, the company needs different access levels depending on the employee (internal or external). The proprietary software suite Wallix Admin- Bastion can do this. More than 400 companies, including Dassault Aviation, McDonald’s and Michelin use the software.

In 2018, Wallix generated €12.6 million in revenue, up 9% compared to financial year 2017. But the company’s shares weren’t as lucky: its value dropped to one-third of its highest point in February 2018. But analysts believe Wallix will recover and they recommend purchasing shares.

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