Open source is experiencing unprecedented growth, according to OpenLogic CEO Steve Grandchamp. His company maintains a library of several hundred certified open source projects that it integrates into customers’ computer configurations. Customers can combine these projects or use them individually.
Unlike other companies known as stack providers, which offer fixed, pre-integrated stacks, OpenLogic does not use a “one-size-fits-all” mentality. Instead, it tailors and tests the selected stacks to ensure compatibility and full functionality when installed on the customer’s computer system.
OpenLogic grew revenues by 2,000 percent in 2006 and is expecting to grow 200 to 300 percent in 2007. Among the company’s new enterprise accounts signed last year are GAI (Insurance), Fujitsu, a major U.S. auto manufacturer and a major defense contractor.
Steve Grandchamp discusses his company’s approach to addressing bigger issues large companies face with open source software.
LinuxInsider: To what do you attribute the phenomenal revenue growth OpenLogic has experienced since last year?
We are seeing open source accelerating. Overall, there is an 87 percent increase. Once our customers take that leap to open source, they continue to use open source projects to further their goals. There are two overriding factors helping this response. One is the cost savings open source programs bring. The other is the innovation to the business process that open source software solutions create. We are seeing open source driving both. Once the adoption starts within a company, it continues to get adopted throughout the customer’s company.
LinuxInsider: What are the primary issues large companies face with open source software?
There are four main issues. The first is product selection. Companies have to answer the question, “Which one is right for us?” Adoption of open source usually starts from the back door. The decision process is deferred because the cost is lower. The second one is program integration. Our technology platform handles all the moving parts that are set in motion when a company transitions from commercial to open source programs. Then legal and auditing people get involved. They have to check into the license issues associated with various open source products. Also, compliance issues may affect the choice of tools used for policy standards. Lastly is concern for support.
LinuxInsider: Do you see any trends developing with the use of either Windows or Linux among enterprise users?
About Linux versus Windows, we find 95 percent of the developers use Windows. But customers want program deployment in Linux. We support both sides. That helps customers decide to go with us in choosing open source solutions.
LinuxInsider: How do you handle that amount of flexibility in meeting the programming needs of a varied base of customers?
This cross-platform environment is handled by our large certified software library. That helps us to offer a real-world environment. Nobody can do totally open source. You don’t change a global company’s installed legacy base overnight. So we provide a good transition for customers.
LinuxInsider: How has OpenLogic managed to tweak its business model to thrive in this dual platform world?
We constantly work at preserving flexibility for our customers. Our whole game is to maintain vendor neutrality. We don’t have a horse in the software race. Our goal is to adapt to what our customers want to use. We price by a subscription based on those customer choices. Business models will change. Specialized functionality will adopt to new trends. But I don’t see proprietary software ever totally going away. Open source will continue to shape the business model that proprietary software companies follow.
LinuxInsider: What do you see as the biggest drivers of open source adoption in enterprise today?
Definitely, cost savings will continue to drive both top-down and bottom-up. We try to take cost out of the business equation. Companies budget less but need to get more done. People do not like when change is thrust upon them. But developers can be more transparent when they are not locked into a proprietary mode. This is a sustainable driver. The challenge is striking the right balance between control, compliance and license.
LinuxInsider: How much of an impact do you see open source having on the industry over the next few years?
Open source in enterprise helps manage the risk. I see it continuing to grow at an exponential rate. The pace of adoption will pick up, not slow down. We are already at the end of proprietary code. This is why we are seeing a need for complimentary business. I don’t think there is any proprietary software that does not use some elements of open source code today.