Reductive Labs, creator of the popular open-source IT automation project Puppet, has raised $2 million in Series A funding from True Ventures, the firm that also invested in (then) open-source marketing automation vendor Loopfuse.
Reductive plans to use the funding, which was announced Tuesday, to build out the functionality of Puppet, a move that won't win it any friends among competitors like Hewlett-Packard's OpsWare.
It's a good time for the company to be raising money. Counting such heavyweights as Google, Digg, Twitter, the New York Stock Exchange, Barclays Capital, Oracle, Sun Microsystems, Red Hat, Harvard Law School, and Stanford University, among others, as Puppet users, this Series A funding puts Reductive Labs in a prime position to add polish to the already powerful Puppet IT automation framework.
I caught up with Luke Kanies, Reductive Labs' founder, to ask him about the funding.
Luke Kanies,
Reductive founder
Q: You've eschewed raising money before now so...why now? What does cash give you that you couldn't (or wouldn't) do before?
Kanies: The last six to nine months has seen two significant changes for us: large company after large company is revealed to be a Puppet user (e.g., eBay, Oracle, NYSE, and large government agencies) and our current sales team isn't built to operate on their time frames or that widely. We also have spent almost nothing on marketing, and increasing funding there will help those companies already using Puppet to see how we can help, while helping those on the fence see the value of our solution.
Also, we've found that our primary constraint today is execution, rather than research or adoption--we have major development areas almost entirely planned and ready to execute, wanting only the funding for the development itself.
Chef claims to be a an upgrade over vanilla Puppet. Is the fundraising in part a response to Chef? How does this help you to compete against and beat the Chefs of the world?
Kanies: The fundraising is in response to our community's and customers' needs, not potential competitors. Chef is a somewhat similar open-source project but you can't buy support, training, or consulting for it, you can't get custom development done on it, and it's only been around for six months. We're obviously staying conscious of its potential to compete, but it's not on the radar for any of our customers today.
That being said, the funding helps us stay ahead of the curve; while Chef has to focus on maturity and becoming suitable for wider audiences, we can continue to play on Puppet's strengths there while we add the next level of functionality for our customers and community.
How is the business doing? Any statistics you can provide around Puppet adoption?
Kanies: In terms of public users, Red Hat, Sun, Stanford, Google, the Guardian newspaper, Shopzilla, Digg, Twitter, and Barclays Capital are just a few of the worldwide leaders using Puppet.
Our stats are relatively minimal, because we just haven't been able to fund much in that aspect of our marketing. But we've got more than 1,200 people on our users list, revenue is growing 300 to 400 percent this year--in a horrible recession--and our Web traffic is growing 400 percent a year.
HP bought OpsWare in 2007 for $1.6 billion, yet the OpsWare software is arguably less elegant and powerful than Puppet. Should HP/OpsWare be nervous?
Kanies: Yes. Our solution has already been chosen over both BladeLogic and OpsWare at multiple companies. People have picked a Reductive Labs solution for less than one-tenth the cost of a less functional solution from one of the big boys that takes longer to install and has a higher upkeep cost.
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Marc Fleury, founder of the successful JBoss open-source project and company, is largely considered one of the great open-source pioneers.
Not many people can claim to have have built a project that continues to inspire tens of thousands of downloads each month, plus the commercial envy of Larry Ellison and $350 million from Red Hat.
Fleury can, but he's not resting on his laurels. Having upended the application server market, Fleury is now funding OpenRemote, an open-source home automation project that was inspired while Fleury was shopping for a "geek chic" home automation system and discovered that it cost far more than he thought it should.
I reached Fleury at his Madrid home on Monday to discuss a wide range of issues. But the longer we talked, the more we focused on the value of open-source communities.
After all, how many developers do you know who have the aptitude to contribute to low-level home automation controls? This is a very different market from, say, operating systems for servers, personal computers, or even mobile phones. While many people use remotes to control everything from their TV to their lighting system, virtually no one knows how to program them.
Hence, I asked the question, "How does community even apply to this market?" His reply:
Marc Fleury
Automation is a primitive software industry, though it's advanced in hardware. There are very few standards. It's 100 percent proprietary. Everything here is deployed in a very proprietary fashion: business models, hardware, software. Everything.
Electricians are our installer community. They're great at what they do, but they're not software developers. It's a fairly rare skill to be able to develop this kind of software. But then, open source has never really been about thousands of developers, contributing to a project. It's about millions (or thousands) of users.
Yes, you need a few good guys, which we've funded through an off-shore Chinese development group. (JBoss, incidentally, was much the same: we funded the development exclusively early on.) The open-source dynamic kicks in when you have a big body of users.
I felt like I was hearing heresy, what with the dearth of paeans to community, but then Fleury has never seemed overly concerned with catering to consensus. This is the guy who dressed in Flavor Flav (Public Enemy) style at Javapolis 2006.
But Fleury wasn't disparaging the value of open-source communities. He was simply being realistic about the value and nature of such communities over the life of an open-source project. Until you have established an exceptional project, you can't hope to attract users. And if you lack users, forget about trying to find a significant body of committed developers.
So what does OpenRemote need more than anything else now? Users. And why? Because users attract installers, and the product with the most installers wins. Period.
Fleury noted:
Home automation is a highly fragmented market, which makes it hard for any company to become big. There are no standards here, so you have hundreds of little vendors. So, if you really want to have a standard, then you need to integrate all of those vendors.
But open source helps to alleviate this, attracting a user community that can hold off competitors while attracting a partner ecosystem. Open source serves as a rallying cry; a rendezvous point. We make the system modular and provide the integration points, and then work to attract an installer community to take advanage of these. It's not a short-term strategy: we're in this for the long haul.
The interest in driving a community of users is that we will breed the next generation of home automation installers. If we can scale the awareness of OpenRemote through a community of users, then we can rise above the noise and get installers to take us seriously. They don't want to spend time on a small player. As we gain mass, we should start to see some of the more traditional benefits of open source, like debugging and development assistance.
Not that OpenRemote hasn't had outside contributors. Fleury noted that as awareness of OpenRemote has grown, the project has attracted a trickle of outside contributions. He expects this to grow over time, but said he won't be concerned by a lack of significant outside contribution until the five-year anniversary of the project. (He also noted that one developer is worth 1,000 users, so he clearly recognizes the value of outside contributions.)
For now, OpenRemote employs virtually all of the developers who work on the project and has recently acquired the exclusive rights to iKNX, an iPhone stack that works with the widely popular KNX automation hardware. If this sounds like JBoss' strategy, it's because it was.
And, like JBoss with Java application servers, the time for OpenRemote may be ripe. Despite the morass of nonstandard technologies and bit players in the automation market, OpenRemote's open-source approach just might have a chance to unify the market. It's now possible to put a $200 computer in the wall, which suggests it just might be feasible for OpenRemote to open source a deeply proprietary and fragmented industry.
Would you bet against Fleury?
Follow me on Twitter @mjasay.
Marc Fleury (of JBoss fame) and Mark Spencer (of Digium fame) have a significant side project: turning us all into couch potatoes, but doing it with open source.
(Credit:
OpenRemote)
Their project, OpenRemote, is the world's first open-source remote for home automation. Given the plethora of systems (entertainment, lighting, etc.) that need to feed into a home automation system, opening up a central repository of controls to enable developers to plug in new ones feels like the right way to go.
Part of the OpenRemote team's vision is tying into the world we already live in, not merely making our future more Jetsons-esque. It's therefore great to hear about OpenRemote's work on an application for the iPhone and iPod Touch, despite the lack of launch-timing specifics:
(We have) put together a first end-to-end prototype of the OpenRemote system. The first milestone is targeting infrared with X10 and KNX following soon...In short, the first prototype we have running comes with an iPhone native application communicating with OpenRemote Box (ALIX hardware) over a Wi-Fi connection. The incoming commands are then translated to other media, in this case infared, and sent out to the corresponding device.
This is a great milestone for us--it's a proof of concept that actually works (imagine that!), and it establishes the infrastucture we will build on for other automation system integration.
It's awesome to hear about a working application prototype from OpenRemote for Apple's App Store, especially since the OpenRemote Web site has been quiet for months as the team has been updating it. Now I just need OpenRemote to write posts for this blog during my vacation, and I'll sign up to be its first customer.
Follow me on Twitter @mjasay.
For a variety of reasons, Matt Quinlan, formerly of JBoss, left Appcelerator some months ago. I was glad to hear this week that "Quin," as he's called, has landed at Loopfuse, an open-source marketing automation company. Quin is one of the brightest lights from JBoss, and will be a credit to Loopfuse as its vice president of Sales and Marketing.
It's a great coup for Loopfuse and, more importantly, a return to the open-source industry by a highly respected JBoss veteran. Welcome back, Quin.
Disclosure: I am an advisor to Loopfuse.
There are relatively few markets that would benefit more from open source than home automation, with its myriads of different electrical nodes and associated complexity.
It is this opportunity that led to the creation of Marc Fleury and Mark Spencer's OpenRemote project, and that recently led them to release the Beehive database, a "Web-based open-source application to collect, format, and distribute home automation codes."
Similar to the Volantis Mobile Device Database which serves as a central repository for the growing array of disparate mobile devices (i.e., data on screen size and resolution, keyboard, etc.), Beehive promises to be a central repository to manage the profusion of home-automation codes.
From the OpenRemote release:
Until now, no Web-based open source central database effort of this scope existed to bring cohesiveness to a fragmented home automation, or domotics, market. Beehive is seeded with 100,000 codes that are compatible with 2,500 devices. Anyone can browse through Beehive, download whichever codes they need, and contribute new codes.
"Today, there is simply no central database for these kinds of codes--only scattered collections in different and proprietary formats," said Christian Bauer, Beehive project lead. "Beehive attempts to change this. We believe there is a need for a truly open, unified way to collect and share all code formats and enforce a clean database schema for easy consumption by both professionals and hobbyists alike."
It's an ambitious effort, one worthy of and conducive to open source. The same sorts of people likely to be fiddling with home-automation setups (as opposed to buying expensive home-automation setups) are the same people who are capable and interested in contributing back to an open-source project focused on home automation. Beehive is an important step in this effort.
It's good to see Marc Fleury go public with his new project, an open-source home automation project (not yet a company) called OpenRemote. We had talked about it back at Open Source Goat Rodeo 2008, but he seemed to be taking his time to actually release something.
The problem that I see with this idea? We already have an excellent Linux-based home automation company called Control4.
Control4 was started years ago by a pair of serial entrepreneurs, Will West and Eric Smith. That broadband in your hotel? They are almost certainly the ones who put it there (iBahn).
I used to be involved with Control4 during my time as an Entrepreneur-in-Residence with Thomas Weisel Venture Partners, an investor in Control4. The company was doing fantastically well back then (2003/2004), and I'm betting it has easily cleared $100 million in sales by now, and has signed up every major distributor and OEM (original equipment manufacturer) one can imagine.
This is a very, very well-run company. Is there room for an open-source competitor?
... Read moreI'm biased on this one, but I had to laugh when I read the Loopfuse blog today. It turns out that Eloqua, Loopfuse's most direct, proprietary competition, is totally unconcerned by Loopfuse as a competitor.
The problem, unfortunately, is that the data says otherwise:
... Read moreI'm not sure why we continue to persist in talking about downloads, but I'm with Stephe on this one: downloads are not the best measure of success in open source. In fact, they're often not even a remote predictor of success (i.e., sales). Having them, as Stephen O' Grady notes, is much better than not having them, but it would be erroneous in the extreme to assume a company with 100,000 downloads per month necessarily has a bigger market opportunity than a company with 20,000 downloads per month.
The 451 Group's Matt Aslett points out that marketing automation software like Loopfuse can help to supercharge an open-source company's conversion rate. Same number of leads in, many more conversions (sales) out. I agree with that. Aslett writes:
Of course, the statistic [in Loopfuse's results] that will have jumped out for many people is the drop from a 40X increase in qualified leads to an 8X increase in engagements. The theory that leads are not enough in open source software has also been well documented. The ability to turn those qualified leads into paying customers remains a missing piece of the commercial open source puzzle.... Read more
Talk with John Roberts, CEO of SugarCRM, and he'll tell you that his website is one of his most valuable business tools. It's often the beginning point to a customer relationship and is also often the source of a deal closing. Few understand web strategy as well as SugarCRM.
(Credit:
JBoss/Red Hat)
JBoss might well be among that few. I was reading through an internal presentation from JBoss and continually find myself impressed by how well Marc, Rob, Bob, and the others grok'd the importance of the web to their business. JBoss knew who was hitting its website, what they were doing there, and how to nurture that initial interest into a sale.
Take a look at the slide to the right. IBM is the master of selling to the CIO and pushing its technology down into an enterprise. Open source generally works in the opposite fashion. You start with the developer/architect and "bottom-up" adoption of technology until it's pervasive enough to catch the CIO's attention...and her wallet.
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