Open Source IPO: Sourcefire public offering

Sourcefire, a Maryland-based firm specialized in intrusion detection and prevention system technologies based on the famous Snort - originally written by Martin Roesch, founder and current Sourcefire CTO - on the 9th of March launched its Initial Public Offering.

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The pricing of its initial public offering of 5,770,000 shares of its common stock at $15.00 per share (before underwriting discounts and commissions). Of those shares, Sourcefire is selling 5,320,000 shares and selling stockholders are selling 450,000 shares. The estimated net proceeds to Sourcefire are $71.8 million.

Sourcefire, making business selling proprietary versions of Snort with integrated hardware and support services, has recently been a market leader by Gartner, and despite the failed acquisition by Checkpoint in 2005 Sourcefire has continued to grow.

As reported by the Magic Quadrant for Network Intrusion Prevention System Appliances:

Sourcefire has addressed criticism of relying on SNORT signatures by increasing the team doing culnerability research to the point that most signatures now are Sourcefire generated rather than SNORT generated.

Keeping it in mind I understand why the prospectus doesn’t spend many words on Sourcefire’s commitment to its community, as pointed out by Matt Asay:

While I’m happy for Sourcefire, if it doesn’t have a plan for actively seeding and feeding the Snort community, I can’t help but view it as a parasite that will limit the amount of value it can get from “its” community.

Sourcefire has proven to be committed and supportive of its community much more than others Open Source firms - whatever it means - and we should judge (and respect) them by their actions, not by a report made for potential investors.

Technorati Tags: Commercial Open Source, IPO, Sourcefire

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2 Responses to “Open Source IPO: Sourcefire public offering”

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1 Ron German
March 12, 2007 at 12:13 am

Looks like Sourcefire’s CTO is on record as being committed to maintaining and expanding the open source community around Snort by advancing the technology. Looks like a pretty strong statement to me.
2 Roberto Galoppini
March 12, 2007 at 5:09 pm

Thank you Ron to join the conversation, the post you referred is pretty interesting. Some excerpts from it:

Some have theorized that doing things like adding a new detection engine to Snort that could do gigabit speeds and then giving it away was a Bad Idea because it allowed our Snort-based competitors to have a more level playing field with which to compete against us. My opinion is that it keeps the ball moving forward and keeps people’s eyes on what we’re doing instead of letting them get bored and going off to check out some other more rapidly developing OSS technology or a commercial solution. Letting your technology get stagnant is almost as bad as closing the technology, once the community is bored they’ll be looking elsewhere for something exciting. One important point to note in this regard (in a product company) is that just because you’re releasing advances to the open source community at large doesn’t mean that you are required to drive your differentiation from that technology to zero. If you want to be able to get people to want to pay for what you do, then having some sort of key differentiation is a must! At Sourcefire we did things like developing a complementary technology that allowed us to address one of the toughest problems in the intrusion detection world, false positives. If you can’t maintain differentiation against your open source product or your competitors that use your open source technology, then you’ve got a problem that you need to get creative around, closing the technology isn’t an acceptable answer in my opinion.Once you’ve open sourced your technology then you have to approach its continued development as a community building exercise that works best by advancing the technology and trying to maintain community-friendly policies and programs. If you do this and try to be clueful about interacting with the open source users as the company grows (a whole different topic) then you have the foundation necessary to build a business of substance. That’s the principle that I originally built Sourcefire on and so far it has worked pretty well.

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