Alfresco

LOCATION:Maidenhead, England

URL www.alfresco.com

SECTOR Enterprise content management

FOUNDED 2005

CEO John Powell

EMPLOYEES 30

FUNDING $10 million, 2 rounds

KEY INVESTORS Accel Partners, Mayfield Fund

Alfresco’s founders have lots of content management know-how: CEO John Powell is the former chief operating officer of Business Objects, a business intelligence software outfit, and Alfresco co-founder John Newton co-founded Documentum, a content management company purchased by EMC in 2003 for $1.7 billion. Tech consultancy Gartner says Alfresco is among the first in the open-source sector to expand beyond basic web content management. Its software is well positioned to become one of the main technologies used for enterprise content management systems, portals, and other solutions from service providers. Alfresco counts European governments and high-end investment banks among its customers. But it faces several competitors including EMC, FileNet, Interwoven, and Vignette.

BitRock

LOCATIONSeville, Spain

URL www.bitrock.com

SECTOR Custom stack

FOUNDED 2003

CEO Daniel Lopez Ridruejo

EMPLOYEES 10

FUNDING Self-funded

KEY INVESTORS Founders

Daniel Lopez Ridruejo, BitRock’s founder and CEO, is a member of the Apache software foundation and the author of well-known open-source projects such as Comanche, a cross-platform configuration tool. His new venture has developed an application installer called InStallBuilder, which packages open-source software so it can easily be installed on multiple platforms. Once developers use InStallBuilder to package their product, their end users can install their software by simply double-clicking and following on-screen instructions. The United States’ Sugar CRM and the United Kingdom’s Alfresco are among BitRock’s customers. But BitRock is not the only game in town; rivals include the U.S.’ SpikeSource and Open Logic.

CS2C (China Standard Software Company)

LOCATIONShanghai, China

URL www.cs2c.com.cn

SECTOR Software/services

FOUNDED 2003

CEO Han Naiping

EMPLOYEES 180

FUNDING $6.25 million, 1 round

KEY INVESTORS China National Software and Services Company (Chinasoft), Zhongjian Group, Huadong Computer Research Institute

CS2C is a Linux distributor for both servers and desktops, and sells a Linux-based office suite and open-source solutions for the finance, healthcare, postal, and education sectors. In April 2005, CS2C partnered with Novell to co-promote Linux and the two have since set up a testing center in Beijing. But the company is dwarfed by government-backed Red Flag (see “Red Flag Thrown,” p. 40), which in 2005 had more than four times CS2C’s 7.1 percent Linux market share, according to CCW Research. In hopes of expanding that share, CS2C signed a deal in July with PC vendor Great Wall to pre-install its operating system on a half-million machines.

EnterpriseDB

LOCATIONIselin, NJ, U.S.A.

URL www.enterprisedb.com

SECTOR Database software

FOUNDED 2004

CEO Andy Astor

EMPLOYEES 80

FUNDING $27.5 million, 2 rounds

KEY INVESTORS Sony, Charles River Ventures, Valhalla Partners, Fidelity Ventures, Comerica Bank

Like early mammals in a world of dinosaurs, EnterpriseDB is trying to avoid getting stepped on. The solution is to be nimble. CEO Andy Astor says the challenge for his firm this year is tobecome known as “a real-world replacement for Oracle, which we are.” The company is gaining traction. It sealed an alliance with Sony to supply database services to its multiplayer gaming platform. In early August, EnterpriseDB grabbed a $20-million second round of funding so it now has the dough and gusto to get the word out. But competing with Oracle will be no easy feat and the company needs to bring in more customers of Sony’s caliber.

Greenplum

LOCATIONSan Mateo, CA, U.S.A.

URL www.greenplum.com

SECTOR Database software for business intelligence infrastructure

FOUNDED 2003

CEO Scott Yara

EMPLOYEES 30

FUNDING $13.6 million, 2 rounds

KEY INVESTORS Dawntreader Ventures, EDF Ventures, Hudson Ventures, Mission Ventures

As business intelligence (BI) becomes a priority for organizations, Greenplum is using open-source databases to improve the infrastructure for BI systems. Greenplum’s Bizgres family of database products can manage anything from departmental data marts to multi-terabyte data warehouses. CEO Scott Yara says he uses open-source technology to deliver products that are high-performance, cutting-edge, and low-cost. The company’s biggest breakthrough came recently when it signed a partnership with server maker Sun to sell a data warehouse appliance able to scan hundreds of terabytes of data. However, finding the right business model on what to sell and what to give away for free will be Greenplum’s big challenge.

IndServe InfoTech

LOCATIONNew Delhi, India

URL www.kalculate.com

SECTOR Accounting software, enterprise operating system

FOUNDED 1999

CEO Sudhir Gandotra

EMPLOYEES 20

FUNDING $350,000

KEY INVESTORS Self-funded

IndServe InfoTech CEO Sudhir Gandotra says his software company can generate revenue of $40 million in two years if he gets investment to hire more employees to tackle projects in the pipeline. IndServe’s accounting package Kalculate, bundled with an enterprise-grade Linux operating system built by the team, is sold for less than $250. But IndServe has its work cut out for it as the company in India competes head on with proprietary package and market leader Tally, which is only marginally pricier. Frost & Sullivan says it believes Kalculate is well positioned to compete for the business of small companies and home office workers.

JasperSoft

LOCATIONSan Francisco, CA, U.S.A.

URL www.jaspersoft.com

SECTOR Business intelligence and analytics software

FOUNDED 2005

CEO Paul Doscher

EMPLOYEES <50

FUNDING $23.5 million, 3 rounds

KEY INVESTORS Partech International, Discovery Ventures, Morgenthaler Ventures, Doll Capital Management

As a developer of open-source reporting software, JasperSoft is targeting large companies or small- and medium-sized businesses. Its software integrates into applications and processes to convert data into reports, charts, and graphs so end users can make better business decisions. Intense competition from already established providers like Oracle, Business Objects, and Hyperion doesn’t scare CEO Paul Doscher, who says “they are addressing 15 percent of an enterprise or power users and we are targeting the other 85 percent.” He says his products are cheaper and less complex, which is why they already have 3,000 paying customers and Siemens Molecular Imaging has replaced Oracle reports with JasperSoft.

Magnet Technologies

LOCATIONMumbai, India

URL www.magnet-i.com

SECTOR Software development, web publishing

FOUNDED 1999

CEO Nirav Mehta

EMPLOYEES 90

FUNDING N/A

KEY INVESTORS Founders and angels

Magnet Technologies developed Utkarsh, an open-source operating system for Gujarati, a regional language in India spoken by much of the country’s business class. The OS is bundled with a dictionary, lexicon, localized open office software, and keyboard, and sells for between $45 and $145, depending on where the buyer is located. Other products include SendMax, a bulk mailing program, and Bee-hive, a web-based content management system and SMS archive, which helps store and search messages received on your mobile phone. But unless the OS is extended to other languages, which analysts say is not difficult, Magnet will remain a niche player.

Open Source Storage

LOCATIONSunnyvale, CA, U.S.A.

URL www.opensourcestorage.com

SECTOR Computing

FOUNDED 2001

CEO Eren Niazi

EMPLOYEES >60

FUNDING Bootstrapped

KEY INVESTORS N/A

Though it started as Open Source Storage five years ago, the company plans to announce a name change and rebranding at this week’s LinuxWorld, becoming Open Source Systems. According to CEO Eren Niazi, the new company will expand to provide complete data center solutions based on open source, from servers to storage systems. Open Source Storage was bootstrapped and profitable from the outset, and Mr. Niazi says he plans to hire as many as 300 additional employees within the next two years to help foster growth in new markets like oil and gas and web 2.0.

Pentaho

LOCATIONOrlando, FL, U.S.A.

URL www.pentaho.org

SECTOR Business intelligence software

FOUNDED 2004

CEO Richard Daley

EMPLOYEES 20

FUNDING $13 million, 2 rounds

KEY INVESTORS Index Ventures, New Enterprise Associates

Richard Daley spent the early part of his career building complex business intelligence systems on mainframes that sold for six and seven figures. Now, he provides software that does much the same thing for a fraction of the cost. Pentaho, his latest company, had developed open-source business intelligence systems that help companies track their spending, produce reports, and mine their own data.

Companies increasingly demand business intelligence tools that give them instant feedback on their performance. “Even within big companies, BI is not pervasive,” says Mr. Daley. “The No. 1 inhibitor is cost.” Pentaho, a Red Herring 100 selection for 2006, thinks it has priced its product right. The average installation costs around $20,000, he says, with larger installations running to $50,000.

The company’s software is created by a community of developers around the world, and is downloaded an average of 50,000 times a month. Competitors include other open-source vendors, such as JasperSoft and Actuate, but Pentaho ultimately sees itself going up against proprietary vendors like Business Objects, Cognos, and Hyperion. Mr. Daley says his larger competitors have grown through acquisition, which results in a lot of overlap. Products developed by open-source developers for Pentaho tend to be very specialized and there is not much duplication.

Pentaho is well-positioned for the high-growth performance management market, which is poised to reach $23 billion this year. Some important wins include Abbott Labs, Divx, and Orbitz. To compete in a market of very big players, Pentaho will have to continue to snag large customers, but Chairman Andre Boisvert, an enterprise software veteran, can open a lot of doors for this fledgling.

Pingtel

LOCATIONWoburn, MA, U.S.A.

URL www.pingtel.com

SECTOR Communications software

FOUNDED 1998

CEO William J. Rich

EMPLOYEES 21

FUNDING $15 million, 2 rounds

KEY INVESTORS Vesbridge Partners, SAIC Ventures

Pingtel offers support and services for one of the few open-source software-only PBX systems. The system is positioned as an alternative to expensive and proprietary PBX solutions peddled by large telecom companies like Avaya and Nortel. Pingtel wasn’t always a believer in open source. The company started as a proprietary player but sold its hardware business and transformed itself into an open-source software champion. Pingtel is fast gaining customers, with more than 1,500 deployments of the software. But changing the existing order in the telecom industry, where proprietary solutions rule, won’t be easy.

Qlusters

LOCATION Tel Aviv, Israel

URL www.qlusters.com   

SECTOR Systems management

FOUNDED 2001

CEO Ofer Shoshan

EMPLOYEES 50

FUNDING $23 million, 2 rounds

KEY INVESTORS Benchmark Capital U.S., Benchmark Capital Israel, Charles River Ventures, Israel Seed

Qlusters claims to have more than 23,000 downloads for its systems management software for data centers since it decided in January to go open source. Its openQRM software provides a single point of management and automation for all the gear businesses use to try and monitor their data centers. Canada’s Loblaw food chain and New York City-based Tradeware Global, which provides electronic access to equity markets worldwide, are among its paying customers. But there are several competitors including Austin, Texas-based Tivoli Systems (a division of IBM), San Jose, California-based Cassatt, and Cupertino, California-based Symantec.

Simula Labs

LOCATIONMarinaDel Ray, CA, U.S.A.

URL www.simulalabs.com

SECTOR Systems management

FOUNDED 2005

CEO Winston Damarillo

EMPLOYEES 5

FUNDING $6 million, 1 round

KEY INVESTORS Mission Ventures, Red Point Ventures

Simula Labs plays a dual role as an open-source incubator and as a support and services distributor for the startups it shelters. The venture has been created by veteran entrepreneur Winston Damarillo, whose last open-source startup, Glucode Software, was acquired by IBM. Simula has already launched two open-source companies, Mergere and LogicBlaze. For now, Simula is focusing on convincing Global 2,000 companies to shift to open source. It’s a strategy that could pay rich dividends but it will also bump Simula up against established open-source giants like Red Hat and IBM.

Solid Information Technology

LOCATIONCupertino, CA, U.S.A.

URL www.solidtech.com

SECTOR Database software

FOUNDED 1992

CEO Alain Couder

EMPLOYEES 70

FUNDING N/A

KEY INVESTORS Apax Partners, Capman

Database specialist Solid Information Technology has long been serving customers in a variety of industries, but in April the company announced plans to participate in the open-source movement with its solidDB Storage Engine. According to CEO Alain Couder, the MySQL community was looking for an enterprise-class database for mission-critical applications. Releasing a beta version for community testing in July, Solid plans to have a final version by the end of the year. While the company says the change will undoubtedly involve a learning process, sales leads from the hundreds of meetings Mr. Couder says he took at July’s OSCON open-source convention might help ease the pain.

Sourcefire

LOCATIONColumbia, MD, U.S.A.

URL www.sourcefire.com

SECTOR Security

FOUNDED 2001

CEO Wayne Jackson

EMPLOYEES 160

FUNDING $54 million, 4 rounds

KEY INVESTORS Cross Creek Capital, Meritech Capital Partners, Sierra Ventures, New Enterprise Associates, Sequoia Capital, Core Capital Partners, Inflection Point Venture

One of the few open-source startups in the security industry, Sourcefire has been through some tough times and managed to bounce back. The company is the maker of Snort, an open-source intrusion-detection and prevention technology that lies at the heart of its network security software. Recently, its $225-million acquisition by Israeli security giant Checkpoint fell through after six months of U.S. government scrutiny, but Sourcefire remains unfazed. It is planning to move into newer areas like Unified Threat Management, which integrates different security measures such as firewall, antivirus, and intrusion prevention into a single box. Over the next two years, Sourcefire says it will buy other companies, or bulk up and take a stab at the public markets itself.

Sunwah Linux

LOCATIONHong Kong, China

URL www.sunwahlinux.com

SECTOR Software/services

FOUNDED 2000

CEO Alex Banh

EMPLOYEES 120

FUNDING N/A

KEY INVESTORS Sunwah Group

Originally conceived as a Linux services company supporting China’s Red Flag Linux—Red Flag (see “Red Flag Thrown,” p. 40) is China’s dominant, homegrown Linux distributor—Sunwah Linux developed its own competing desktop operating system in 2003. Last April, it won the LinuxWorld Best Desktop Solution award—the only Chinese company to have done so—for its Linux desktop offering called RAYS LX 1.5. The company has avoided the server market, but it does make embedded systems for point-of-sale systems, set-top boxes, and consumer electronics. Competition for the desktop is ferocious and margins are low, with Chinese and big foreign players all vying for a piece of the market.

Ulteo

LOCATIONParis, France

URL www.ulteo.com

SECTOR Operating system

FOUNDED 2006

FOUNDER Gaël Duval

EMPLOYEES 3

FUNDING Self-funded

KEY INVESTORS Founder

Ulteo’s founder, Gaël Duval, is a Linux veteran best known as the man behind France’s Mandrake Linux (now called Mandriva Linux), the third-most-used Linux system globally. He’s also the co-founder of Mandriva, a Paris-based Linux company that publishes the Mandriva Linux operating system. His latest venture, still in stealth mode, aims to create a bridge between open-source software and web navigation, with the goal of making it easier for users of Microsoft’s proprietary Windows operating system to use open-source applications. The Open Office suite, for example, has many features that are not accessible via Ajax, a Web 2.0 technology which allows the embedding of some applications into web browsers. Challenges include ensuring security and data privacy as well as figuring out a way to smoothly offer some proprietary applications to Linux users. The company is in talks with venture capitalists.

Xensource

LOCATIONPalo Alto, CA, U.S.A.

URL www.xensource.com

SECTOR Virtualization

FOUNDED 2004

CEO Peter Levine

EMPLOYEES 60

FUNDING $23.5 million

KEY INVESTORS Kleiner Perkins Caufield & Byers, Sevin Rosen Funds, Accel Partners, New Enterprise Associates

Xensource rides on the coattails of a popular open-source software, Xen, which allows different operating systems like Windows and Linux to run on the same server without slowing down the machine. For businesses, this can mean reduced complexity in the data center and lower costs. With some of Silicon Valley’s biggest VCs backing it, Xensource has been inking deals to have its software built into other products and then make money from support and services. The company has even partnered with proprietary software’s poster child, Microsoft, but it is a move that has drawn some strong criticism from rival VMware.

Zend Technologies

LOCATIONRamat Gan, Israel

URL www.zend.com   

SECTOR Web applications

FOUNDED 1999

CEO David Banks

EMPLOYEES 90

FUNDING $17 million, 3 rounds

KEY INVESTORS Walden Israel, Index Ventures, Intel Capital, Azure Capital Partners

Computer experts credit Zend founders Andi Gurmans and Zeev Surkasi for the growing popularity of PHP Hypertext Preprocessor, an open-source scripting language used to create dynamic web applications. PHP competes with other open-source languages like Java, Perl, and Python, but it is by far the most popular for building dynamic web applications like wikis and blogs. Zend’s business model is to give away an open-source scripting engine and to sell services for a “closed-source” line of PHP development tools. It counts Disney, Boeing, and Viacom among its customers.

Zimbra

LOCATIONSan Mateo, CA, U.S.A.

URL www.zimbra.com    

SECTOR Email and collaboration software

FOUNDED 2003

CEO Satish Dharmaraj

EMPLOYEES >50

FUNDING $30.5 million, 3 rounds

KEY INVESTORS Benchmark Capital, Inventures Group, Redpoint Ventures, Accel Partners, Presidio DTX, Duff Ackerman & Goodrich

Zimbra is an email software company that provides an open-source alternative to messaging and collaboration. The company’s email server and client software provides email, calendaring, and contacts based on open-source code, which makes it much cheaper than proprietary solutions like Microsoft Outlook and Lotus Notes. It also offers advanced web capabilities such as integration with Google maps, Oracle applications, and VoIP through Skype. For example, users can call a number mentioned in an email directly without switching from Windows to Skype. But Zimbra will find it tough to go up against the dominance of Microsoft’s Outlook and Exchange server.

Contact the Writer:Editorial@RedHerring.com