This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Venture Dollars Flow to Open Source

Godzilla Meets Bambi?

And now open-source companies face competition on their own turf from conventional software giants that include Microsoft (MSFT - Get Report) and Oracle. The database giant began selling support for Red Hat Linux in late October.

There's some question about Oracle's claim that its support costs are much lower than Red Hat's, but having a giant stomping on one's turf is never good news. Indeed, shares of Red Hat are off 16% since Oracle entered the open-source business. They're now trading at $16.34, a loss of 40% since the beginning of 2006.

Making matters all the worse for Red Hat is the alliance between Novell (NOVL) and Microsoft, announced in November.

Microsoft will use its massive marketing muscle to help market Novell's Suse Linux, and it agreed to a partial truce in the legal wars that slowed the adoption of Linux.

Even so, it would be surprising if at least some of the new crop of open-source start-ups don't grow to profitable maturity.

Investors, however, will have to be patient. The new class of start-ups is probably three to five years away from the kind of growth and stability needed to go public.

Will it be worth the wait? Ask Marc Fleury, the decidedly procapitalist founder of JBoss, the North Carolina-based developer of a popular open-source application server.

His company says Microsoft will use its massive marketing muscle to help mark Novell's Suse Linux snapped up by Red Hat for a cool $350 million earlier this year. Not a bad day's work for a communist.

4 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
MSFT $40.66 -0.74%
ORCL $43.15 -0.67%
RHT $75.75 -1.23%
AAPL $124.43 -1.54%
FB $82.22 -1.18%


DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs