SpikeSource: Supporting free software in the enterprise
A US-based firm which launched in Europe in 2006, SpikeSource can boast both an advisory board and a board of directors which include several free software and computing luminaries. Under the slogan of 'Business-Ready Open Source', the company distributes, integrates, manages and supports free software stacks. It also provides an automated testing and configuration management platform as part of its subscription-based maintenance services. Daniel James asks Dominic Sartorio of SpikeSource how the company works with open source software, and what its plans for the future are.
DJ: How did you come to work for SpikeSource?
DS: I've been working in the Bay Area for about twelve years, and went there right after grad school. I've got a Masters engineering degree from MIT and was doing operating systems work. I did various things in the Valley; I started at Oracle, doing applications development, and worked on a lot of reporting and integration projects, so that's how I got into the applications space. CRM and different things were getting started there at the time. Then the dot-com bubble happened, so I did various start-ups, and at that point I figured out I was more comfortable working in early-stage outfits where that rare combination of vision and execution is at a premium, and I just feel most energised by that.
Of the couple of start-ups, one had a good exit event, so I had that positive reinforcement. Then when the bust happened, I worked at BEA Systems. In hindsight, I've never worked with so many smart people as at BEA. There I worked with WebLogic Server and WebLogic integration, and we were starting to get involved with open source. We started engaging with the Apache Foundation, getting some good visibility into how open source works. Then I did a stint with a systems management vendor where we were also working with open source. We were involved with projects like JMeter, doing website response times.
So in my last couple of companies there was this emerging trend towards open source as a good, alternative means of delivering high-quality products. A different means of developing and delivering software which adds up to very good quality at very low cost. With so much drive in the corporate world towards squeezing cost out of your operation, it seems like we're at the cusp of a new way of developing software, but... there's always a but! The big challenge is - where do you get the support? How do you ensure a consistent level of quality, support and integration services?
Then I heard of SpikeSource, and got started there when my last start-up was acquired by Computer Associates. I was looking for something to do, and found a company that was taking a new approach to open source. This is to create open source solutions, which is ultimately, what companies care about. Of course they are interested in Linux, and that's great, but they've got a business problem they want to solve. There are these open source applications which are getting more mature, they've been around a while, and have feature parity with whatever else you might buy out there. SpikeSource is ensuring that consistent level of testing, quality, and support. I thought "This is very interesting - a company that's right there in the middle of a major industry trend." So that's how I ended up there.
DJ: Is there a specific sub-set of applications that SpikeSource deals with, or will it support potentially any application?
DS: The long-term vision is to support every and any application out there. Of course, we don't boil the ocean out of the gate - we're starting with what we're observing as the most demanded low-cost applications in the business world. We started with Drupal as our web content management offering. That was the first application that we did, because we saw a huge demand out there. Everybody's got a website, everybody's got to manage the content on their website, and nobody wants to have to hire a lot of IT guys to do what's just a basic part of doing business. That's been a great seller for us - very low cost, mostly $5,000 to $15,000 deals, but if you add them up, there's volume there.
We started branching out - our next application was a CRM offering, the Java-based Centric. Then we did Open-Xchange for email and groupware. More recently with JasperSoft, we're delivering both their real-time reporting product and their online analysis product. Most recently, we formed a relationship with Alfresco, who do enterprise content management and document management.
Those applications are our initial set, and there are going to be more. We plan to deliver an instant messaging capability, a mobility SyncML offering. We're evaluating various open source ERP offerings. Along the way, we're investing in automation and tools to take these applications, bring them to market, and add our value - our consistent testing, build and support value proposition - a lot quicker. So the pace at which we can deliver new applications is only going to go up. By late 2007 I hope we'll have a good fifteen to twenty of them available, and the long term vision is 'no limit'. We would become the de-facto market maker for delivering business-ready open source applications. That's our tagline!
DJ: Does SpikeSource just support the applications, or does it support complete solutions based on a specific distribution of GNU/Linux?
DS: The whole stack; we support everything above the OS, but not including the OS. So we're not distributing Linux ourselves; we intentionally did not do that, because we want our solutions to be platform-independent. We support various flavours of Linux - Red Hat Enterprise Linux version 3 and 4, SuSE Linux Enterprise Server 9 and 10. We're looking at Ubuntu and Debian to potentially support in the near future. So we want to be platform-independent, but of course with the focus being on open source operating systems.
What we've seen is that each of these solutions - Alfresco, Open-Xchange, Centric, Drupal - each of those applications was designed with specific performance, scalability and other kinds of use cases in mind which drove a decision about which specific components to rely on. Which specific database - you'll talk to one of these vendors and they'll say 'we love MySQL, we love their security model and that's why we went with them'. The other vendor will say 'we love Postgres, we love their licensing model' and so on. Every vendor will pick a different version of Tomcat, if they're servlet based.
So we decided early on that we needed to support infrastructure, because all these solutions rely on it, and we wanted to provide that turn-key, 'single throat to choke' support capability. We're not going to develop a single, one-size-fits-all stack, and then expect everybody to run on it, because then you're going to deliver a stack which isn't optimised for these various solutions. Our approach instead is to figure out the combination of components that is optimised for that solution, and deliver a solution stack for them. It may be a different solution stack for Centric than for Open-Xchange, than for Drupal and so on. We think there's a lot of value in doing that, because then you get the optimised solution, and everything's supported by us. We deliver the patches and updates over SpikeNet, which is our update service for the applications and all the components they rely on.
I mentioned we're investing in tools and process automation. How do we take this big, combinatorial matrix of each solution having its own combination of components, and do as much as we can in an automated fashion? As opposed to just hiring tons and tons of support people, engineers and QA people to do all that work?
DJ: What's the relationship like with the upstream developers? Is there a potential for conflict, given that you're supporting, as a third party, the application which they may wish to derive support or consultancy income from?
DS: First, we find that there are really two classes of 'open source ISVs', if you will. One is if it's purely a community, with no for-profit organisation representing it, and Drupal is an example of that. The more common case is where there is some kind of for-profit commercial entity - like Centric CRM, Open-Xchange, JasperSoft, Alfresco - they're all for-profit.
In the former case, we want to work very closely with that developer community. We don't want to be the big 'evil' for-profit entity trying to co-opt them. What we instead do is that we say "Look, we want to drive the adoption of this software, and we're doing it by adding value so that organisations that can't or won't just download from drupal.org and support it themselves, would instead become users of it. We frequently contribute back to the community, whether it's bug fixes or other enhancements. So we have a great relationship with the Drupal community; we also formed a relationship with a consulting company that has a handful of Drupal committers in their organisation. They provide, on an hourly basis, third level support. That's how we can live up to a support SLA of a 24 hour response time, or whatever the case may be.
With for-profit vendors, we present ourselves as "We can provide you with an instant channel." We're investing in a big way in a global channel, and we have our own regionally-based sales organisation which is signing up a variety of resellers. We also work with larger distributors; we recently did a partnership with NEC, to be our major distributor in Japan. We did a partnership in the UK with Interactive Ideas, they're a major distributor, and in France, with Groupe Bull. Many of these open source vendors are themselves small, who are making money on relatively thin support and service margins, so they can't invest in the same channel sales and marketing capacity that we do. Our experience is that in all cases, we're able to add channel and sales capacity that is above and beyond what they would normally have.
In some cases you'll run into some conflict situations with a customer or a reseller, and then there's a good, open dialogue with them to figure out who to work with. In most cases though, the value that we're adding, with the turn-key installs and configuration, and the SpikeNet services, is speaking to a certain class of customers, who otherwise would feel "We really can't work with this open source product yet, because we don't have the skills, or we don't have the budget to deal with it."
DJ: You mentioned launching in the UK - would you like to tell us more about that?
DS: We are a US-based company, but we want to operate globally. For about a year now, we've had a European operation, based in the UK. We have a VP of sales based here, and there's a team of sales people and a couple of support guys in the UK. That's how we're able to directly reach and support channel partners here, and we also provide the ability to take 24x7 support calls by having an office here. We have a support office in the United States and we also have a large presence in India, both engineering and technical support. You call SpikeSource and somebody's going to pick up the phone. We're continuing to invest here in Europe, so we've got pretty aggressive headcount plans to grow from the fifteen people we have now to double that number by the end of the year.
DJ: What sort of customers are you seeing in the UK, or Europe?
DS: Similar to what we see in the US or Japan. Our target customer, really the sweet spot in our market, is that small to medium enterprise. It's that range of maybe between fifty to a thousand employees, where you're big enough to need IT - you need email, a CRM system to track sales activity, you may need reporting, you have a website and you need to manage that content - but, you're too small to have a large IT staff or the budget to buy the proprietary alternatives. And you don't feel confident about being locked in to Microsoft. Even in Microsoft's case, they're quite expensive, and they could blow your budget too.
What do you do? Open source speaks to you, there's a promise of low cost of ownership, but it's difficult to realise if you don't have the testing, support, deployment and configuration in place. So, really our value proposition speaks most directly to those SME customers, and we're finding that to be true around the world. It's equally true for both the private and public sector - we've been driving a lot of success in the public sector. The New York Police Department is a customer of ours; they've got Open-Xchange certified, which we deployed and they are using. For them, it was "We're the Police Department, we have a lot of feet on the street, but in terms of the headquarters operations around IT we don't have a big staff. Real-time communication is very important for us, both email and instant messaging, groupware, blogging, discussion forums and that kind of thing. Help us deliver a fully-functional solution that's low-cost and so that we don't have to worry about the support and maintenance." We were able to deliver an offering which was very good for them, and we're seeing a similar theme coming from all of the customers we're signing up world-wide.
DJ: Do you know how many users that New York Police Department system has?
DS: It's several hundred. That's pretty common - on the low end, we'll serve maybe ten to twenty users for a given solution. On the high end, it's thousands; even though our sweet spot may be the SME with up to a thousand users, most of the solutions we offer do scale, and every now and then we do sign a larger enterprise. Recently we signed the Weather Channel, which is a large organisation in the United States providing various news and media services with weather forecasting and weather reporting. They're a multi-thousand person organisation, and they've got Centric CRM deployed. They have a multi-channel sales organisation with hundreds of people, so they signed up with a thousand-seat licence. So we can scale with larger enterprises, but that's not really where the volume is.
World-wide we have about sixty regional resellers, and about ten of those are in the UK. We just signed Groupe Bull in France, they've got an open source practice with a group of resellers. Right now, we're still focused on building the channel and reseller capacity. I'd expect that soon we'll have more end-customer success stories.
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