Actually, IIRC revenue was $130M per quarter. In fact, after Cygnus was acquired the division it became drove revenue in Red Hat for a long time. It's been a very long time since I looked at it, but the records are public so if you are interested you could find out.
I'm curious about Sendmail. What was the business model? Cygnus's business model was essentially custom development. They did have a proprietary product for a short time, but as one of the terms of sale of the company they ditched it.
Just looking at sendmail now, it appears they were trying to make money dual licensing. I agree that this will never work.
Sendmail's original model was to get the best Sendmail consultants in the world under one roof and then deploy them building custom solutions.
Sadly a new CEO came in and declared that "the margins are in boxed software, so that's what we're going to focus on" and then fired all the consultants.
So maybe you're right, maybe it would have worked if they had stuck to the original plan.
But even then, it still wasn't a path to a huge business. 500M a year in revenue is definitely amazing and I would kill to own such a business, but it's not "rocket ship" successful, which is what most of the folks with this model are aiming for.
That's very unfortunate. I'd love to see someone else try that model, but I suspect that you are right that many people have a gold rush mentality. Getting paid for doing work is not as good as getting paid many times for having done some work in past. I've had a similar experience with a couple of startups I've worked on. You can show them how the custom development has high demand and is generating revenue, but they want to sell the box and gamble on getting their "multiples". From a certain perspective I can understand it. According to my link, Cygnus was limited in growth because they just couldn't hire people fast enough.
I'm curious about Sendmail. What was the business model? Cygnus's business model was essentially custom development. They did have a proprietary product for a short time, but as one of the terms of sale of the company they ditched it.
Just looking at sendmail now, it appears they were trying to make money dual licensing. I agree that this will never work.