Software Pulse

Business Strategy for Software Executives

October 30, 2006

Dave Rosenberg

Launching an Open Source Business

Moving from open source ìprojectî to ìcompanyî involves unique considerations for todayís software startups.

By Dave Rosenberg, MuleSource

There are many great open source projects that have dedicated developers, users and admirers. But only a few have the possibility of becoming legitimate businesses. The trick is to figure out the market, the business context and the viability of sustained revenue.

I recently went through a successful fundraising effort to build a company around an open source project called Mule, which was developed by my co-founder, Ross Mason. We raised $4 million from Hummer Winblad and Morgenthaler earlier this month.

The takeaways from our experience moving from open source project to open source business may serve as guideposts for other second-generation open source startups.


New at Software Finance
A one-stop destination for the latest software stock, M&A and VC data.

The new Finance section compiles the news, data and deals which drive the software industry. Debuting this month, the Sand Hill 30 stock index charts the progress of 30 companies which best represent the new world of enterprise software and services. The M&A and venture capital sections showcase software industry trends, the most recent deals and hand-picked news on the latest partnerships. We will continue to add and revise these pages in the coming months so send us your feedback.

VCs: Widen Thy Net

The latest data show venture capital investment is holding steady at $6 billion per quarter ñ not bad. But a new report from Topline Strategy Group finds that venture investors could improve their returns if they broaden their areas of investment. Founder Jonathan Klein outlines where VC money is flowing now, and where new opportunities lie in this weekís post to the Blog on Software Finance.

To Hype or Not to HypeÖ

Every innovation is new ñ but how oftenÝ should tech companies play the ìnew and improvedî card when they market their products? David Taber of Taber Consulting offers some perspective and advice on how and when to hype ìnewî products in this weekís post to the Blog on Sales & Marketing.

Publish Your Perspectives!

The Blog wants your opinions. Send your thoughts on the enterprise software industry to and weíll publish them in our blog.

Open and Shut

Oracleís Open World was arguably the most exciting event of the year ñ making new friends, new enemies and lots and lots ofÝ news. Also, India invests in America, America invests in India, and a software IPO filing? Read these stories and more software news of the week in the news summary.

Learn to Work Better with Others

Lower communication costs and globalization make for a tremendous opportunity for knowledge-industry workers to collaborate. Management must improve the networks through which this collaboration occurs in order to best take advantage of Enteprise 2.0 potential. Learn more in this article from The McKinsey Quarterly.

Poll: Oracle vs. Red Hat?

Will Oracleís move to offer service & support to Red Hat customers mean death to the open source company?
Take our Pulse Poll >>

Last week, readers gave their opinions as to whether they thought a new technology investment bubble is building.
Give us your opinion and see the results >>

More at

Presenting the next wave of software licensingÖ
Read the most important enterprise software industry news of the week >>

Source Labs gets $7 million.
Monitor the latest software venture capital deals >>

PDF Solutions buys Si Automation.
Size up last week's software M&A deals >>

Cadre Technologies names Chris Scherpenseel as CEO.
See who's made it to the top in our list of recent software executive appointments >>

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Parting Thought

ìOpen-source is nothing more than peer-review science.î
ñ Thomas Friedman

Courtesy of Malcolm Kusher, The Kushner Group