Ten Bleeding-Edge Open Source Companies

Wednesday May 2nd 2007 by Jeff Vance and James Maguire
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Firms that represent the future of open source, from start-ups to established enterprise plays. We look at strategy, funding, and management.

If financial backing is any indicator, open-source companies are hot these days. In the past year, Linux Networx raised $37 million, Zend Technologies hauled in $20 million, and MontaVista scored $21 million. For those keeping an eye on exit strategies, last summer saw JBoss acquired by Red Hat for a cool $350 million.

Of course, the VC stamp of approval comes at a cost. Open-source vendors with VC money in their coffers feel a certain warmth breath on their neck. It's time to make a profit, boys. Gone are the days when work can be done on an informal “project” basis. Suddenly, old-fashioned headaches like marketing and staffing are as important as forward-looking open source code development.

In other words: Meet the new boss, same as the old boss.

But whatever headaches they endure to get funded, there’s no doubt that this new generation of companies is remaking the software industry. New alliances are being formed, new attitudes are being shaped. What exactly the software business will look like when these firms mature is far from clear, but it won’t be the same.

Creating fertile ground for these pioneers are large enterprises which, driven by cost considerations, have a new willingness to consider open source. The bluest of the blue chips now buy open source. Furthering the process, proprietary vendors are losing their vise-grip, allowing open source firms to push into the cracks.

With this changing environment, hundreds of open source firms have sprung up in the last few years. They’re young, they’re hungry, and they’re smart. (And they’ve got ultra-hip VC funding in their pockets.) Ready or not, here they come.

With that in mind, we’ve chosen ten firms that reflect the future of the open source business.

1. GroundWork Open Source

Location: San Francisco, CA

Founded: 2004

Product or Service: GroundWork provides IT operations management software for Linux, Unix, Windows, and mixed-OS environments. GroundWork’s Monitor product centralizes management and monitoring and is intended for an entire network deployment, including servers, applications, databases and network equipment. It provides both active and passive monitoring via agent-based or agent-less methods. Users can select a combination of synthetic polling, log file monitoring, and automated actions based on policies and user-determined thresholds. GroundWork Monitor also includes tools to analyze and record the performance of an IT environment with features such as performance graphs, executive-level dashboards, and SLA business reports.

GroundWork is based on Nagios, an open-source IT monitoring tool. According to GroundWork, the value-add here is that the company takes Nagios and “transforms it into an enterprise-ready IT management solution by adding functional enhancements as well as deployment services and ongoing support.” In other words, this is yet another open-source company banking on the Red Hat model.

For enterprise deployments, a key consideration is that GroundWork Monitor enables an automated response to alarms, allowing system administrators to specify what should be done as a result of a specific event. Event triggers can automatically launch scripts to fix simple problems, such as by restarting servers or clearing disk space.

In 2006, GroundWork says that it had a 400% increase in subscription revenue while surpassing the 200-customer milestone. Those customers include Ingenuity Systems, UNC Charlotte, and Yodlee.

Funding: Secured $12.5 million in its third round of funding in February 2007, bringing its total funding to $24 million. Investors include JAFCO Ventures, SAP Ventures, Canaan Partners and Mayfield Fund.

Competitive Landscape: IT management is currently dominated by the “Big 4”: HP OpenView, IBM Tivoli, CA Unicenter and BMC Patrol. The opportunity for companies like GroundWork rests with the fact that these competitors offer big, complex, expensive platforms.

According to a recent Gartner report, Big 4 customers aren’t entirely satisfied. About 55% of those surveyed said they would be interested in open-source alternatives to the Big 4, which is well up from 29% in the 2004 survey.

According to GroundWork, they are competing in the $9 billion market for IT management software. They note that the market is being driven by two forces: First, basic systems and network monitoring functionality has become commoditized to the point where numerous products now reliably perform similar functions. Second, there is a growing ecosystem of open-source products and vendors specializing in systems and network monitoring, while other IT management applications have matured rapidly.

Thus, cost is the issue here, and it is GroundWork’s main selling point. According to the company, unlike competitors who price on a per-device monitored or per-agent basis, GroundWork is licensed per management server, with no restrictions on the number of devices monitored.

If all of these features are commodities, isn’t GroundWork trying to then carve a niche in an already commoditized market? Perhaps. However, customers haven’t yet recognized the commoditification of this market and still shell out top dollar to the Big 4. This fact alone should give startups in the space some breathing room and time.

Open-source competitors include Zenoss, Hyperic and Qlusters.

Management Team: Ranga Rangachari, president and CEO, spent 11 years at Legato Systems, an enterprise storage management company acquired by EMC in 2003. Tony Barbagallo, VP of product management and marketing, was formerly VP of marketing at EVault. Phil Bradley, VP of sales, was recently VP of sales for nCircle. Victoria Grey, VP of strategic alliances, was previously VP of sales and marketing at EMC Insignia. Craig Thomas, CTO and chief architect, was formerly CTO of Steelwedge Software. Stuart Thompto, VP of engineering, was previously VP of engineering at JasperSoft.

2. MuleSource

Location: San Francisco, CA

Founded: 2006

Product or Service: MuleSource’s CTO, Ross Mason, started the Mule project in 2003 because he was “frustrated by integration donkey work.” Mule is a java-based Enterprise Service Bus (ESB) platform through which enterprise developers can perform a number of integration tasks. Developers can use Mule to create new applications, bring legacy apps and platforms up to date, and enable a Service-Oriented Architecture (SOA).

ESB is a relatively new class of software. Traditional message systems, such as IBM’s MQ or Microsoft’s MQ, are limited in their reach, connecting one application to another. It’s basically a one-to-one messaging model.

As the need to share data in the enterprise increases, something better is needed in order to reuse and leverage data, in a standardized way, regardless of its source. With ESB as a middleware layer for message transport systems, a one-to-many model is enabled and enterprises have the ability to flexibly share data among a greater number of applications and services. Another advantage of ESB is that it enables real-time access to business information. As data changes, it is updated across the enterprise, so data should never be stale.

Designed for multi-protocol transactions, Mule can be used in a number of ways: for system-to-system messaging, as transactional middleware, or as the integration component of an application server. Mule contends that its modular, reusable programming approach results in much faster integration than with proprietary solutions, at a much lower cost.

In February 2007, Mule released a beta version of a connector for Salesforce.com, which would allow customers to use Mule as middleware to share Salesforce.com data with a variety of enterprise applications and with other SaaS offerings.

In January 2007, Mule reached the 500,000 download milestone, and by mid-April the number had topped 650,000. Customers include H&R Block, MLB.com, and HealthTrio.

Funding: Raised $4 million in 2006 from Hummer Winblad Venture Partners and Morgenthaler Ventures.

Competitive Landscape: This is a relatively new market segment, but analysts are bullish on the space. According to Gartner, the market for application integration and messaging software is about $8.5 billion, while the market for the support and services of these products is also highly lucrative.

Much of this growth will be driven by the adoption of SOA and SaaS. If service-based apps are to catch on, users will need tools they can use to share and repurpose information. They won’t own the apps, so they’ll need tools that ensure they’ll own their data.

On the proprietary side of the fence, competitors include Progress Software, Cape Clear, Fiorano, Tibco, Vitria, SeeBeyond and BizTalk.

There is plenty of competition among other open-source ESB providers as well. After its acquisition of JBoss, Red Hat can now count the JBoss ESB platform as part of its open-source portfolio. Iona Technologies’ Celtix product competes in this space, and after the company’s April 2007 acquisition of LogicBlaze and its ServiceMix ESB product, Iona is a well-positioned contender. Additional open-source ESB providers include the Apache Software Foundation and WSO2 (see below).

Management Team: Dave Rosenberg, CEO, previously served as CIO for Glass Lewis & Co., an investment research and proxy advisory firm, and was a principal analyst for the Open Source Development Labs; Ross Mason, CTO, was formerly CEO of SymphonySoft; Ron Park, VP of engineering, previously served as group director of engineering for Oracle’s CRM applications division; Mike Lewis, VP of sales, was formerly an account director at TIBCO. Damian Raffell, VP of EMEA sales and operations, was formerly with Sun Microsystems in the UK, where he was responsible for driving Sun’s business integration and enterprise Java business.

3. Digium

Location: Huntsville, AL

Founded: 1999 (as Linux Support Services)

Product or Service: Founder and CTO Mark Spencer developed the open-source VoIP PBX software that became Asterisk. Asterisk supports a range of TDM protocols for the handling and transmission of voice over traditional telephony interfaces. It features VoIP packet protocols, such as SIP and IAX, and it supports U.S. and European standard signaling types used in business phone systems. It can serve as a bridge between next-generation integrated voice and data networks and existing infrastructure.

Used in combination with Digium’s telephony interface cards, Asterisk is an open-source alternative for voice and data transport over IP, TDM, switched and Ethernet architectures. Digium’s additional telephony offerings include the standard business-class features, including conferencing, voicemail, voice menus, and IVR. More advanced features include dynamic content creation, speech recognition, and text-to-speech.

The company will release a VoIP PBX appliance that runs on Asterisk this quarter. Intended for SMBs and branch offices, Asterisk Appliance will support up to 50 users.

According to Digium, over two million users have downloaded and deployed Asterisk. Customers of the company’s supported, professional version include Aheeva, Wallstreet Electronica, PlatinumTel, and the University of Pennsylvania.

Funding: Closed its first VC funding in August 2006, a $13.8 million investment from Matrix Partners.

Competitive Landscape: How do you even begin to assess the market for enterprise-class VoIP software and services and IP PBX equipment? Let’s just say it’s huge and will only continue to grow.

Analyst numbers vary, but they all trend steeply upwards. Infonetics, for instance, reported that the IP PBX market grew 18% in 2006, with IP PBX equipment buoying the overall enterprise telephony market, which itself grew 9% in 2006, reaching $8.9 billion worldwide.

A few research firms caution against the hype, however. Most notably, Forrester’s report “U.S. Enterprise-Class VoIP Services, Q1 2007” argues that suppliers are over-hyping their offerings and that customers aren’t yet sold. Enterprises are moving cautiously towards an all-IP infrastructure because they don’t yet understand the benefits, nor do they know what services carriers will provide down the road.

Deciphering who fits where in this market is best done with a divining rod. Figuring out direct, head-to-head competition is even fuzzier, as most vendors are broadening their portfolios and even indirect competition poses a serious threat. For instance, Digium doesn’t directly compete with hosted VoIP service providers – or does it? What about voice-data convergence? Support for legacy circuit-switched products? We could go on and on.

Anyway, players in this space are many, including hosted providers like 8x8, Covad Communications, M5 Networks, and XO Communications. Equipment vendors include the likes of Alcatel, Nortel, Cisco and Avaya. Carriers will start to figure out the space eventually and target it. Mobile services will evolve and factor into this market too, and then there are the Skypes and Vonages of the world, which don’t have much enterprise-class impact in the U.S. yet, although Skype is already widely used as a business tool in the EU where users simply want to avoid roaming issues.

Management Team: Mark Spencer, chairman and CTO, founded the company in 1999 as a Linux support provider. Spencer led the development of several Linux-based open source applications, including the Asterisk Open Source PBX and Gaim Instant Messenger. Danny J. Windham, CEO, was formerly president, COO and director of ADTRAN; Steve Harvey, VP of worldwide sales, was previously VP of channel sales and competitive service providers for ADTRAN; Bill Miller, VP of product management and marketing, previously led voice product management at 3Com.

4. Vyatta

Location: San Mateo, CA

Founded: 2005

Product or Service: Vyatta’s infrastructure software allows customers to deploy an enterprise-class router on x86 hardware platforms. Vyatta plans to deliver pre-loaded appliances as well. The first such product, an open-source router, was released in October 2006.

Vyatta’s software is based on the Extensible Open Router Platform (XORP) from The International Computer Science Institute (ICSI). It includes the typical range of features – support for common network interfaces, inclusion of standard routing and management protocols, and configuration via command-line interface or web-based GUI. Besides its routing capabilities, the appliance also includes firewall and VPN features.

The company intends to profit through subscriptions packages providing ongoing updates and support, as well as by delivering a range of ready-to-deploy appliances. The appliances are currently built on Dell PowerEdge 860 servers.

Funding: Backed by $18.5 million raised in two round of funding. Comcast Interactive Capital led the second round and was joined by all previous investors – JPMorgan Partners, ComVentures, and ArrowPath Venture Partners.

Competitive Landscape: Cisco, Cisco, Cisco. Competing here is foolish, brazen, or gutsy-smart. If Vyatta can carve a niche, they’re doing something right. Besides Cisco, the other major players in this space are 3Com and Juniper.

As is typical with open-source offerings, the company trumpets cost savings, flexibility and the avoidance of vendor lock-in. Since so many networking features are converging at the appliance level these days, Vyatta can make a pretty good argument for open-source being a better path for convergence and interoperability than the proprietary status quo.

Management Team: Kelly Herrell, CEO, was the SVP of strategic operations at MontaVista Software before joining Vyatta; Michael Fox, VP of customer services and operations, was formerly VP of business development and consulting engineering at Atrica; Robert Bays, CTO, previously served as CTO at InfiniRoute Networks; Tom Grennan, VP of engineering, joined Vyatta from Cisco, where he was director of mid-range platform software development; Keith Hartley, VP of alliances and partners, previously worked on partnering strategies for several companies, including Red Hat, SuSE, Phoenix Technologies, and IBM; Anatoly Kaplan, VP of engineering operations, was formerly VP of application development for IntelliRisk; Dave Roberts, VP of strategy and marketing, was formerly CTO and VP of strategy at Inkra networks.

5. Avidence

Location: Sunnyvale, CA

Founded: 2006

Product or Service: Avidence is developing an open-source platform that will allow customers to develop business-focused video applications, and incorporate video into existing business applications. The company is still in the development phase, so it’s too early to comment on product specifics. However, their intention is to expand business video beyond its niche in conferencing and physical security.

“Avidence was founded on the principle of delivering the power of sight to mainstream enterprise applications,” said Frank Bishop, CEO. “With the Avidence system it is possible to automate very complex tasks that previously were dependent upon human sight.”

The Avidence Video Application Server will have the ability to organize raw video streams, either live or recorded, into structured, actionable information.

Funding: Closed a $5 million Series A round in March 2007. Funding came from Red Rock Ventures and ArrowPathVenture Partners.

Competitive Landscape: According to Avidence, the digital video market is about $15 billion and will continue to grow. As analog video technology is phased out, simply offering replacement products represents a large opportunity.

However, as rich media penetrates the enterprise, the far-reaching goal is to evolve everything – be it video, voice, images or raw data – into a standardized form that can be manipulated and shared in an automated and predictable way.

Market segments on Avidence’s radar screen include security, surveillance, retail, asset tracking, conferencing, and even casino gaming.

Management Team: Frank Bishop, CEO and president, previously served as SVP of sales and marketing at ActivCard, a provider of identity assurance solutions; Param Singh, chief marketing officer, was formerly an entrepreneur-in-residence at Outlook Ventures. Before that, he held senior management positions at several companies, including Macromedia, NetObjects and Infoseek/Disney Internet Group; Steve Jones, VP of engineering, was with MySQL before joining Avidence, where he held architecture and management positions; Wayne Stidolph, architect, previously served as VP of engineering for Siderean Software.

6. WSO2

Location: Colombo, Sri Lanka

Founded: August 2005

Product or Service: WSO2 provides integrated middleware stacks based on Apache components. It currently offers four products, a Web Services Application Server, an Enterprise Service Bus, a Web Services Framework platform, and an Identity Solution that enables CardSpace authentication.

The flagship product is Tungsten, an Apache-based application server designed specifically for Web Services. It supports XML, SOAP, and WSDL. In addition to the standalone version, WSO2 also offers a version that can be hosted in Tomcat and J2EE application servers.

Funding: Secured $4 million from Intel Capital in 2006.

Competitive Landscape: Web Services are all the rage these days, so WSO2 is certainly not alone in targeting this space. The company contends, however, that it is different because it builds solutions for Web Services, rather than concocting middleware to glue Web Services capabilities onto the existing middleware for heavy-transaction Java-based applications. Layering may make sense when it comes to security, but with application platforms too many layers proves worrisome.

Or, as WSO2 puts it, their products “treat Web Services as first-class components instead of as a facade to existing middleware platform components. . . [e]nabling, rather than hiding, the XML nature of Web services to application programmers.”

At first glance, WSO2 competes in the Enterprise Service Bus market. After all, ESB products focus on sharing data across an organization. WSO2 does indeed offer an ESB product, but their attention is more focused on building Web Services from the ground up. In other words, while they understand the necessity of legacy support, they seem to be more interested in spawning future apps rather than extending existing ones.

Management Team: Sanjiva Weerawarana, chairman and CEO, founded WSO2 after spending close to eight years with IBM, where he helped found their Web Services platform; Jivaka Weeratunge, VP of finance, was previously managing director of at Strategic Consulting; Davanum Srinivas, director of customer engagements, previously spent seven years with CA; Paul Fremantle, VP of technical sales, was formerly a senior technical staff member at IBM; Jonathan Marsh, director of mashup technologies, was previously at Microsoft where he was the primary representative for W3C standards Working Groups in the XML and Web Services area.

7. Pentaho

Founded: 2004

Location: Orlando, FL

Product or Service: While “business intelligence” is a vague term that sounds like it could mean anything, business intelligence software is quite straightforward. It tracks and monitors various business metrics (like inventory and sales trends), presenting them in a “dashboard” display. Because it enables managers to view many metrics simultaneously, businesses can’t live without it. It’s no wonder that the BI market is worth $12-16 billion annually, depending on who’s counting.

Although there are many open source BI apps maintained on an ad hoc, project basis, Pentaho claims to be the first professional open source BI company (a claim likely disputed by open source BI vendor JasperSoft).

Pentaho (pronounced “PenTAho”) offers a comprehensive BI suite. Its suite includes a Reporting app that handles data sources ranging from XML to OLAP; an Analysis tool that shows how sales are trending over time; and a Data Mining tool that runs data through sophisticated algorithms to uncover unseen patterns.

Pentaho is Java-based, and runs on top of any platform: Windows, Linux, Mac, Unix. The company offers both 24/7 and 9AM-5PM support options.

Buyers can purchase support from Pentaho directly; alternately, its suite is also offered on a SaaS basis by third party vendors such as Lucidera, a VC-funded start-up that offers BI apps on demand.

Funding: In its first round of funding, Pentaho secured $5 million from New Enterprise Associates and Index Ventures. It added an additional $8 million from the same two VC outfits in July 2006.

Competitive Landscape: Proprietary software vendors sometimes dismiss open source by saying, “Sure there are a lot of free downloads, but not many real enterprise users.” But Pentaho, by being a company instead of merely a project, wins business from enterprise buyers. Its client list includes Expedia, Frontier Airlines, Bank of America, and the FDA.

The company scored big in April, when Sun announced that Pentaho Reporting is being added to OpenOffice. (The release is due out later in 2007.) Piggybacking on top of OpenOffice’s user base, some tens of millions, has the potential to propel Pentaho to a far high plateau.

Some of Pentaho’s stiffest competition comes from the entrenched proprietary vendors, like Business Objects, Cognos, and Hyperion (acquired by Oracle in March). These established BI vendors offer a more extensive library of bells and whistles in their reporting-analysis software than does Pentaho.

Pentaho, however, is generally far cheaper than these proprietary vendors, and so is positioned to have greater success in the mid and even small market.

To increase its potential user base, the company is constantly working to make its suite easier to use. With that in mind, later in 2007 Pentaho will introduce an intuitive graphical dashboard designer to the program. Its current release already has that, but using it requires power-user know how.

Management Team: Andre Boisvert, Chairman, was an executive with Oracle, SAS Institute, Cognos and Sagent; Richard Daley, CEO and founder, began his career at IBM, and went on to start two BI software companies, Keyola (acquired by Lawson) and Appsource (acquired by Arbor Software); James Dixon, CTO, was CTO at Hyperion; Doug Moran, Senior Architect, worked for Hyperion, and for the space shuttle program at Kennedy Space Center; Marc Batchelor, Senior Architect, was with Hyperion, and consulted with BI vendor IOC, where he designed BI apps for Fortune 500 companies; Lance Walter, Marketing VP, was a VP with Business Objects, and worked for Siebel and Hyperion.

8. Linux Networx

Founded: 2000

Location: Bluffdale, Utah

Product or Service: Linux Networx earned its stripes in the rarefied world of HPC (High Performance Computing), in which companies build the monolithic machines that make up the “Top 500” most powerful computers. Linux Networx has 17 entries on this list, having deployed multiple massive clusters for customers such as the Army Research Laboratory, Los Alamos National Laboratory, NASA, and Sandia National Laboratories.

Over the course of selling more than 500 Linux clusters to over 200 customers, Linux Networx has emerged as a major player in both the Opteron- and Xeon-based Linux cluster market. The company’s LS Series system configurations, featuring its Clusterworx software, are optimized to handle thorny problems in computational fluid dynamics, structures codes, and other disciplines that are beyond the scope of mere mortals. Later this year Linux Networx will release Clusterworx 4.0, which it claims will offer greater ease of use for the non-technical user, and integration into heterogeneous computing environments.

Funding: Backed by Oak Investment Partners and Tudor Ventures, Linux Networx has scored some sizeable funding wins recently. The company raised $10 million in a Series C funding round in early 2006, and scored an additional $37 million later in September 2006, including investments from Lehman Brothers and Canaccord Adams.

Competitive Landscape: Linux Networx is a company in transition. The company is moving away from building mega-machines, the “Top 500” that are built for government and university clients, and is expanding its focus in the industrial segment. Its customer list of industrial buyers includes Boeing, Northrop Grumman, John Deere, Audi, and Shell.

The industrial systems tend to be smaller (typically 128 to 256 nodes), and repeatable, instead of huge one-offs. In contrast to the four or five months the mega-systems need for installation and acceptance, Linux Networx sometimes completes on-site implementation in 4-5 days.

In terms of revenue growth, moving into this market makes sense: There are far more customers in the industrial sector. Research firm IDC has identified the industrial sector as the sweet spot for growth in supercomputing.

But Linux Networx faces challenges in this market. It remains a relatively small company, so it doesn’t have the economy of scale that big fish like IBM do; it lacks the mass production capacity that allows leeway with wholesale prices.

On the other hand, the company’s size can work to its advantage. It’s small enough to work with clients on a one-on-one basis. The company stresses the personalized nature of its solutions portfolio.

Side note: Recently, computer maker Silicon Graphics (which emerged from bankruptcy protection in October 2006) hired former Linux Networx CEO Bo Ewald to head the company. Will the fact that one of its competitors is now headed by a former CEO affect Linux Networx fortunes? It’s unclear.

Management Team: Jack Kenney, CEO, served as CEO of Everex Systems, UniSil Corporation, and Quantegy; Bobbi Hazard, Senior VP, Sales, was a VP at Cray and at nCube, and also worked at Dell and Sun; Dick Linville, VP, Strategic Relations, was a VP at Novell, and held management posts at Unisys, United Telecom, and Netwise-Microsoft; David Morton, VP, Research and Development, was technical director for the Maui High Performance Computer Center.

9. Mindquarry

Founded: 2006

Location: Potsdam, Germany

Product or Service: Founded last summer by three graduate students at the Hasso-Plattner-Institute in Potsdam, Germany, Mindquarry makes collaborative software designed to allow maximum efficiency between employees working on team projects.

It’s a Web 2.0 package, including a wiki, a meeting minutes editor, and a Task Management tool with a system of reminders and notifications. Ease of use was the developers’ goal, and Mindquarry claims that users require no training. It facilitates working offline as well as when connected to the Net.

Based on Java, Mindquarry uses Apache Jackrabbit as a JCR-conformant content repository, Apache Cocoon as the Web framework, Dojo toolkit for the frontend and SWT for the desktop client interface.

Mindquarry’s first version, released in February 2007, is available for Windows, Linux, Mac, VMWare and all open source platforms. In true open source tradition, Mindquarry is a free download. The company makes it money through support. Developers are allowed to extend Mindquarry and sell these contributions under a proprietary license.

The company has plans to offers its application in an SaaS mode beginning in the fall of 2007. Users will pay a monthly license fee and access the app remotely through a Web browser.

Funding: Mindquarry received an undisclosed amount of seed funding from Hasso Plattner Ventures, an investment firm dedicated to promoting German entrepreneurialism. (Hasso Plattner is a co-founder of German giant SAP). Company representatives are traveling to the Red Herring Spring 2007 event to seek additional VC funding.

Competitive Landscape: Mindquarry is far from alone in the collaborative software market. It competes head to head against small proprietary offerings like Basecamp; against open source groupware offerings from Scalix and Zimbra; and against established apps like IBM’s Lotus Connections and Microsoft’ Sharepoint. In short, it’s a small fish in a very big pond.

The company’s move into the SaaS market this fall will likely help it compete in the mid-size market. But getting started won’t be easy. Mindquarry will have plenty of heavy lifting to do to deploy the remote infrastructure needed for SaaS, from setting up a payment process and customer interface to offering 24/7 maintenance.

In its favor, the collaborate software market – driven by the evolution of Web 2.0 – is a healthy one, as companies more frequently combine the efforts of far-flung employees. To fully harness a team with members in Dehli, San Francisco and Berlin, a company needs a good, affordable, intuitive, collaborative program. Certainly there will be plenty of firms shopping for such an app in the years ahead.

To better promote itself, Mindquarry has plans to set up a U.S. office, perhaps in the Bay area. The start-up is a recipient of a Red Herring 100 Europe award, given to the top 100 private technology companies based in the EMEA (Europe, Middle East and Africa) region each year.

Management Team: Lars Trieloff is COO (he wrote a book, DocBookXML); Alexander Saar is the CTO; and Alexander Klimetschek is the Chief Architect. Sandro Groganz, VP marketing, was formerly communication VP of eZ System.

In November 2006, Stephan Voigt, who was a co-founder of Scopeland, came on board as CEO. As of April 2007, Mindquarry has 10 employees.

10. LogicalWare

Location: Edinburgh, Scotland

Founded: 2002

Product or Service: LogicalWare’s Mailmanager is an open-source email response management system. Compatible with Microsoft Outlook, Microsoft Exchange and most standard email servers, it is intended for an array of customer service scenarios.

In a sense, it’s an “intelligent” mail app. As unsorted email arrives, Mailmanager first sorts out spam, viruses, and other unwanted or corrupted email. It then classifies and routes email to the appropriate teams or recipients. For instance, it sorts mail for the sales team from customer complaints, even delivering it to the appropriate person within each group.

To aid business communication, Mailmanager provides an instant email response with a tracking number. It allows organizations to set service levels and priorities, has templates for standard, automated replies, and can identify emails that have not been responded to in a timely fashion. Other features include reporting and search capabilities. Mailmanager is delivered as either an on-demand application or as an appliance. Customers include The University of York, UK Digital Solutions, and Phoneavenir.

Funding: Backed by approximately $550K in early stage funding, which the company raised in 2005 from the Sigma Capital Group.

Competitive Landscape: Most of the open-source action when it comes to email is on the systems themselves, not the management of them. They try to make Outlook work on top of Linux, provide an Outlook-looking alternative to Linux, or start from scratch to offer a built-for-Linux email platform.

Many of these have basic PIM, collaboration, or CRM features, but LogicalWare goes beyond the basics and provides full-fledged email management for customer service teams. As far as we know, LogicalWare is the only vendor providing open-source email response management.

Competitors with proprietary solutions include eGain, KANA, and emailtopia.

Management Team: Peter Ellen, managing director, previously built the Fopp retail chain and has 17 years experience in retail and media industries; Andrew McKie, sales manager, previously spent nine years with HP, where he was responsible for various sales and marketing teams across several verticals, including manufacturing, retail, telco, and public sector; Kevin Campbell, CTO, was formerly with a UNIX consultancy, where he worked to develop a customized email infrastructure and managed telecoms infrastructure; Bill Dobbie, non executive board director, has led a number of successful private equity-funded businesses.

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