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San Mateo-based open source pioneer Zelerate - formerly OpenSales - is closing its door today according to a number of reliable but unconfirmed sources. The company shed half of its staff on Friday, leaving a skeleton two dozen or so manning the pumps this week.

Zelerate (formerly OpenSales) sells consultancy and services around a software libre content management system that goes head-to-head with Broadvision, IIS and their ilk. The company was co-founded by former eToys CTO and ex-NASA alumni Rob Ferber.

The company shed 34 staff in January. Its mailing list started bouncing today, and we received no reply from the PR operation. Hardly surprising, as it was axed on Friday we now learn.

"Closing the deals was their problem," a source close to the company told us. That we guess, and the panic flight of VC funding out of Silicon Valley tech ventures.

However Zelerate found itself unable to leverage the potential of the GPL license with the real free software community, say insiders.

"The company couldn't accept any code from the community, even if we wanted to. [Zelerate] turned down a complete set of patches porting AllCommerce to Oracle because the lawyers hadn't drafted that agreement yet..." said the source, speaking on condition of anonymity.

"Management had no idea how to leverage open source development into an asset for the company, and instead behaved like a normal software development company that gave away its product for free."

Not a business model to keep VCs on board, we guess, particularly when they're fleeing Silicon Valley tech start-ups. ®

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