Big eCommerce Invests Millions to Advance Open Source

At the core of open source software is the ability to peek inside and view information that is laid out in plain sight. So I find it amusingly ironic that as one of the leaders in open source ecommerce platforms, Magento decided not to disclose the identity of a company that last year invested $22.5 million in the advancement of its open source solutions.

I guess if you were paying very close attention and are extremely gifted at reading in between the lines, you might have been able to deduce something was going on last March when Magento issued a press release noting an expanding relationship between their company and PayPal. Then, seven days later, CEO Roy Rubin announced through the company blog that Magento had secured their first ever capital investment. Ding!

Despite the ambiguity right from the beginning, the truth is Magento wasn’t under any obligation to reveal the source of their new found capital, and in fact, they never did. It was eBay who finally revealed the news last week when they announced they had accrued a 49% stake in the ecommerce platform provider.

Both companies claim that Magento will handle operations exclusively, and that the ecommerce solutions they provide will still include the ability for their customers to implement several payment options and not just an exclusive payment gateway through PayPal. It’s an interesting detail that begs the question of whether or not Magento is working on an open source project that might someday integrate into the eBay market. Perhaps only time will tell. But then again, based on how this relationship began, it’s possible neither of the companies will tell us at all.

Regardless of the vague details surrounding how this deal began and where it might head, I laud the move as a partnership capable of providing a significant amount of positive leverage for everyone in the open source community. Committers spend a good deal of time explaining why open source solutions can compete and even surpass the capabilities of their proprietary competitors, and this collaboration between Magento and eBay may strengthen the case that favors all kinds of open source ecommerce platforms. And yes, that includes HotWax Media and the intelligent open source ecommerce solutions we provide through Apache OFBiz.


Jared Matkin is a staff writer for HotWax Media with a background in PR, Branding and Marketing. He’s also a light-hearted and an opinionated character who will join other HotWax Media employees and advisers in periodically posting his thoughts on topics ranging from enterprise eCommerce to business and technology.

DATE: Feb 23, 2011
AUTHOR: HotWax Systems
Enterprise eCommerce, eCommerce, eCommerce Platform, eCommerce Solution