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Brutally Honest Fault-Finding Pays Off for Coverity

By Jack M. Germain
Jan 7, 2010 5:00 AM PT

Coverity cut its startup teeth seven years ago trying to figure out how to commercialize static analysis and software code integrity. The company, whose software developer tools are used by some of the biggest firms in the industry, released in November Coverity 5, a completely reengineered software analysis solution.

Brutally Honest Fault-Finding Pays Off for Coverity

Many companies are still looking for strategies to find software defects. Coverity took a different tact by focusing on the defects that impact the software developer the most. The company's five founders started Coverity after completing a research project that showed software code-writing rules could be managed and error-checked efficiently through software analysis tools.

The four graduate students and their professor found that the concept worked quite well. They started to apply the tool to open source. The feedback they received urged them to press forward, igniting the spark that blazed into the idea that they could make a company out of it.

The startup team bootstrapped for five years before accepting US$22 million in funding in late 2007 to use for two acquisitions. By 2008, its fifth year in business, Coverity had over 400 customers and crossed $20 million in sales.

"We were in a good position in being able to take licensed code from the lab that we developed and turn it into a sellable product. It was very difficult to sell the technology," Seth Hallem, CEO of Coverity, told the E-Commerce Times.

Coverity 5 Primer

Coverity 5 is a defect mapping and defect impact management toolset. It locates errors, defects and failures that software changes can introduce. It maps the defects across the code in one software package and shows the impact across shared code in sister products and applications, then automatically prioritizes them by severity. In other words, it lays out how much it will cost the developer if the defects cause a failure.

The product is specifically designed to help development organizations mitigate the business risk of software changes across their entire product portfolio.

"Mitigating the risk of software changes is one of the biggest challenges for our global customer base, and we are tackling this problem head-on with Coverity 5," said Hallem.

Growing Pains

In getting Coverity off the ground years ago, one of the biggest challenges involved was keeping the company alive as the startup team developed the product. Most companies in Silicon Valley started with funding and launched with version 1.0 of their software product, noted Hallem.

"We had no funding and had to balance product development with looking for money sources and customers," he said. "Five years from 2003, we survived on just customers and selling our product."

Only their professor kept his day job, working with his former students on a sabbatical. He returned to his Stanford University lab. The four former graduate engineering students worked full time from the birth of the fledgling company. That left the founders on their own to figure out how to build the company the old fashioned way, Hallem said.

Slow Growth

In the beginning, the founders realized that getting customers was all that mattered. They had to generate revenue and eliminate all other distractions. At that early stage, nothing else mattered, according to Hallem.

"Step by step we started to win over customers. We started with six or seven customers in 2003. Then we saw a growth factor of 10 in 2004," he said.

Typical of any successful company, Coverity started to thrive because it was very successful in getting customers' attention. That held true even in the tough sell of static analysis.

"Since December 2005, Coverity directed its focus on branding the company. It took on some funding money and brought on board a chief marketing officer, who focused on building brand," Theresa Lanowitz, founder of analyst firm Voke, told the E-Commerce Times.

The successful branding meant the company was no longer just technically focused. The company has a set of solutions for enterprise. It partnered with others to branch out, she added.

Problem Solvers

Coverity's goal is to provide a solution to a problem all software users -- and thus software developers -- face. Software does not always work the way it is supposed to.

"Issues in the software industry is a 50-year-old problem that needed to be solved now. Software has taken on such a critical role," Hallem said about his company's mission.

All software companies start out with a firm view of what their product will do, but over time, engineers lose track of some of the reliability goals. Coverity's products help software engineers stay on their original track, according to Hallem.

Coverity has a clear field to achieve that goal for itself as well as for its customers, and as Lanowitz sees it, the company faces minimal competition.

"Coverity is not in a feature war. It is not going after just features. It has a number of solutions to offer customers," she said.

The company has always been a step ahead of the market, and its founders saw that faster is not always better, explained Lanowitz.

"Coverity is very well-positioned. The company is moving beyond the status quo. It is pushing the software life with a sell to the next level," she said.

Who Buys?

Coverity's customers could fill a list of Who's Who in the communications and aerospace fields. The company's paying customers include five of the top six largest telco equipment providers and five of top seven largest aerospace defense contractors.

In addition, 11 of the top 13 consumer electronics companies are Coverity customers. So are three of the top mobile device makers in the world.

"What those stats mean to me is that these communities of software developers who really have a need for high integrity software -- software that does what is supposed to do -- are recognizing that not only is the kind of technology we're offering important, but Coverity is the place to get it," said Hallem.

Challenges Aplenty

Just as Coverity had no easy path to tread in winning over its customer list, it has no easy task in store to remain successful. Perhaps its biggest challenge, Hallem stressed, is keeping at the bleeding edge of innovation.

Second to that top challenge is maintaining the balance of running the company with a firm academic focus.

Much of the company's current challenge lies with the success or failure of its just-issued Coverity 5 software suite. Strengthening the connection of software and product impact through Coverity 5 is the message potential new customers have to get. Making that connection is a big step forward, admitted Hallem.

A lot of innovation is yet left to be done, noted Hallem.

Also in the company's future is educating all software developers that it is essential to ensure integrity at all points in the software development process.

"We have to continue to push that value to the market," Hallem concluded.

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