Last weeks headlines for the open source community featured news of Sourcefire, the makers of Snort as well as other intrusion detection and prevention tools, filed this week with the U.S. Securities and Exchange Commission for an initial public offering. This will be an interesting IPO bid for the company considering it is a security software vendor but also one that has quite a bit invested in an open source community. One key to Sourcefire's success thus far has been the quality of its open technology security platform, an approach that lends quite a bit of extensibility to the Sourcefire business model as well as strengthening its prospects for future growth.
I'm not so sure how much investor interest is going to be garnered by a smallish security software vendor, even if it is one that has done a fairly remarkable job of building strong technology in a relatively hot sector (IT security). The firm plans to raise $75 million in its initial public bonanza, but even after the failed acquisition by Israeli-based CheckPoint Software for $225 million it doesn't look like the IPO will stack up with Red Hat or even VA Linux (granted the IPO market was in an entirely different stratosphere during that time period).
Regardless, I still think Sourcefire is a strong company with good financials in the form of significant Fortune 100 market penetration, $54 million to date in funding, 97% revenue growth rate in 2005, as well as a really sparkling product community surrounding Snort. Plus the company remains a standard bearer for how to integrate an open source product community into the for-profit operations of a growing company.
Unlike the aforementioned IPO's for open source companies, this one will go quite a ways towards providing a good set of indicators for the entire open source industry. So far the IPO market has produced only one clear cut success for the open source world, Red Hat. A strong showing by Sourcefire will provide a further reaching stamp of approval for the open source business model in general. The company has already proven it can make money -- its on pace to pull in $40 million or thereabout this year -- so going public isn't as much a stretch as might initially seem to be the case.