Open source has seen a flurry of executive appointments in the past few weeks, but no open-source company can top GroundWork for the level of CEO turnover in the past two years. In 2007, Ranga Rangachari helmed GroundWork. By 2008, company co-founder Dave Lilly had replaced Rangachari.
In early 2009, GroundWork slotted Lilly into the COO role, replacing him as CEO with Peter Jackson. Jackson was recently CEO of Intraware, a company he grew to $100 million in sales and eventually sold in January 2009, and seems a competent chief to lead the company.
Even so...three years, three CEOs. Worried a bit by all this change, I reached out to Jackson to get his perspective on GroundWork's business and its open-source opportunity.
You come from a Web 2.0 background. What brought you to GroundWork?
What's nice about Web 2.0 technologies is that they're really focused on creating controlled communities. The original Web development efforts didn't do a good job regulating users on what they can and can't do. Applying that thinking to open source allows producers and users to share in safe and open areas. This includes blogs, entitlement-based distribution, shared testing and QA, questions to groups, uploading training videos, etc.
In GroundWork's case, we need to appeal to both the open-source community and to IT-reliant enterprises. This combination of Web 2.0 community building, while understanding and meeting the demands of enterprise customers, is a great chance for me to bring my experience in both areas to the company.
You took Intraware public. Do you think GroundWork and other open-source companies will have the same opportunity?
I see open source radically changing the software market in the next 24 months. Customers of traditional enterprise products and services have way overpaid for years. As companies analyze their capital expenditures more deeply, they suddenly find huge value gaps between their historical IT management purchases and open-source alternatives.
With this in mind, if the stock market recovers in a couple of years, there should be many IPOs in this sector.
It's a tough market in which to be raising money. What did GroundWork hear from the VC's as it raised its recent round and what part did your existing revenue play in the funding equation?
Groundwork has SAP Ventures, JAFCO Ventures, Canaan Partners, and Mayfield deeply involved in this project. We've completed a round but haven't closed it yet, as it appears to be growing based on some additional opportunities. Our investors clearly see acceleration in our downloads, enhancements to the product (version 5.3) and revenue growth. Fourth quarter 2008 exceeded target by over 40 percent. All of these factors were key contributors and make it easier for us to raise money, even in this tough environment.
Do you still run into customers that are uncertain about deploying open source, particularly in the data center?
Yes, but that uncertainty decreases with each customer win. Our customer list is quickly becoming a set of brand-name users. We are now over five years old, and the majority of users experience a stable product, an organized service support team and a mature understanding of common demands.
Today we have state governments, banks, car makers, retailers and film producers. Having references in all of these areas helps gain that trust. With IT budget tightening these days, you still might not "ever get fired for picking IBM," but you might get laid off. Customers who have switched to GroundWork often save enough to prevent that.
Where do you see GroundWork in the next year?
This economy is good for open source. I think we'll double our customers. At the same time, we'll be enhancing services to the community of contributors, and building out a large set of 2.0 community infrastructure to enhance education, communication, and partnerships.
It's a good message for a bleak time, but GroundWork has competition from Hyperic, Zenoss, and others...and that's just in the open-source IT management market. His background should bring the stability and leadership GroundWork needs, however, to hold its own.