CIOL:"Impact of Open Source not yet at application layer"

Polese is now the CEO of SpikeSource, a company founded in 2003 in Silicon Valley. The company grew out of an incubation project at the venture firm, Kleiner Parkins.

SpikeSource provides a build- test- patch framework for Open Source enterprise applications. The company is in a way promoting the adoption of Open Source applications in enterprises and SMBs since it takes care of the primary headache in Open Source and Linux-support and maintenance.

Polese spoke to Priya Padmanabhan of CyberMedia News, on the company’s work, the dynamics of the Open Source world and how SpikeSource is enabling Open Source application providers.

What are the solutions from SpikeSource?

We have a test framework to deliver, maintain and support a variety of Open Source applications that are available. These include email, business intelligence, content management, enterprise document management and collaboration. We use the framework to automate the way the stacks are built and deliver them to customers and channels.

We look for the best Open Source applications on the Internet like Drupal, Alfresco and Jasper and work with leading ISVs in the Open Source market to integrate and implement the applications. Our solutions can be bundled along with the applications into a package that can be installed in a few hours versus days it would take to stack it and integrate it one by one. The real power comes from Spikenet that is an update service for those stacks.

Does SpikeSource develop specific applications?

We don’t develop our own applications but are leveraging what is already there. There is an abundance of Open Source applications out there that are getting better and better. They are getting enterprise ready and in some cases providing stiff competition to proprietary companies. Cycle times in these applications are more rapid. The challenge is always comes in integrating combinations of the components. None of them stands alone because all of them are part of a larger whole. The innovation for computer science is the process automation around build, test and patch. This is the fundamental challenge in software. We believe Open Source is the most exciting thing in software because of the innovation happening there and also the cost considerations.

We are doing this in a way that delivers a wide range of applications and eventually we will be able to enable hundreds of companies to deliver applications by solving support and maintenance issues.

How do you sell your solutions-direct model or though resellers?

Our business model is the channel model. We have solution partners/ Value added resellers (VARs) who range from small and medium firms to large SIs. Open Source VARs tend to be smart and aggressive and look for next generation software and business opportunities through solutions on Open Source. For years, proprietary software created a difficult economic equation for these VARs. Their margins are getting squeezed. With Open Source applications, partners can add their own value through implementation services, customization and integration of applications. It gives them flexibility and more margins. SpikeSource makes it possible for them to participate in subscription revenues.

We see the channel as being important in the economics of Open Source because we are looking at the small and medium business market. Around 80 per cent of SMB purchases come through channels. They buy software from their trusted partners.

In India, we have a tie-up with InfoAxon.

A lot of large players like Oracle and HP are also getting seriously into Open Source? How do you view this competition?

We are focused not on infrastructure but on the application layer. There is no other company that is doing what we are doing today which is identifying best of breed applications and creating packaged offerings. We provide low-cost maintenance and support. The big differentiator is that the big companies are not yet at the application layer. We need these companies as partners and collaborate with some of them. We have a reseller arrangement with Intel. They have one of the biggest software channel networks in the world that includes HP, Dell and others. The first product we are putting through that channel is called Suite 2. It is a combination of wiki, blogs and RSS software. Ultimately there is the potential to offer all our products through that channel.

How does SpikeSource’s India operations fit into the overall scheme of things?

SpikeSource India is an important component of the company’s success. We decided to make India a key hub for innovation. SpikeSource India will ultimately conceive, develop and take ownership of products. Sales and marketing will also happen here. The team here is working on Spike Ignited applications, and integration, building and maintenance of packaged applications.

What kind of customers are you targeting?

We have customers who range from Fortune 500 companies to SMBs. But our core focus is the SMB market which is the most underserved market for enterprise software. They find enterprise applications expensive, complex and do not have the scale to implement and maintain them. So it’s a greenfield market for Open Source. The IT spend is growing quickly.

Do you think Open Source based enterprise applications have the potential to take on top application vendors like SAP and Oracle?

It is already happening. Look at the success of RedHat. Microsoft now has an arrangement with Novell. MySQL is becoming a force in the database market. These players are slowly taking market share. We are seeing Open Source having a meaningful impact on the software market. But we are in the early days of that. The people at Alfresco include founders of Documentum and Interwoven. They have built next-generation content management software that is better than existing products. Open Source is not attractive primarily because it is free but because it is better. It is designed with what customers need today. We have not yet seen its impact at the application layer though we have seen it as infrastructure level. We aim to help change that.

Why is it that SpikeSource does not do direct selling to customers?

We want the widest reach possible. This is not possible through direct sales. Using the channel route, you can reach thousands of customers. SMBs depend on VARs and to get to this segment, it is important to go through channels.

VARS are playing an important role in Open Source. They are in a new era to tailor customization and add value. They are becoming empowered by Open Source.

© CyberMedia News

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