The Global Startup

Kim PoleseCEO, SpikeSource

Strange things are happening in IT

Brazil throws out Microsoft.

So do regions of Spain, Germany, Belgium.

China does its own Linux distro.

Customers want out of big vendor agreements.

U.S. DoD pushes for open source procurements

… And in the Global Economy

Companies Outsourcing Core Functionsproduct development, manufacturing, distribution, support

Countries Competing via Talent ArbitrageIndia, China, Eastern Europe, Brazil …

The Virtual Company Now Becoming the Norm

There’s a term for a market ecology like this one

Mature.

Filled with commodities.

Yesterday, in physical goods.

Today, in the form of software, and skills.

What’s Changed:the Demand side is Supplying itself.

This is much more than a shift in the balance of power.

It’s how power now belongs to everybody.

The big market power is now in The Long Tail.

With software, and skills, most solutions no longer come from big vendors.

They don’t even come from the usual suspects.

As Tom Friedman says,it’s a flat new world.

“Globalization 1.0” empowered countries (1492-1800).

“Globalization 2.0” empowered companies (1800-2000).

“Globalization 3.0” empowers individuals and small groups (2000-now).

We’re shrinking the world and empowering individuals.

Credit where due:Top-down worked for a long time

Power was concentrated at the top

Communications flowed from the top-down

So did ideas, strategies, products

It worked through the entire Industrial Age

Top-down software, and business, was natural in its time

Monolithic vendors made monolithic systems

The world was smaller, simpler

Data was concentrated, isolated

Systems, and Companies were vertically integrated

But then the Net came along

A whole new software and business habitat.

End-to-end communications.

Zero-friction sharing and collaboration.

Soon the ecosystem filledwith a whole new breed of software, and

new pockets of expertise

TestingTechnical Support

Q/A

Wireless

Chip Design

JIT Manufacturi

ng

HR Admin Call Centers

Knowledge Outsourcing

Legal Expertise

… And New Ways of Doing Business

Core vs. Context

Seamless Communication Interfaces

Hubs of Excellence

The Net and Open Source were both built on principles that forever changed “business as

usual”

Nobody owns itEverybody can use it

Anybody can improve it

Open Source is a Global Phenomenon

France, 5%

Poland, 6%

Brazil, 7%

Germany, 8%

Other, 38%

US, 18%

Spain, 5%

Italy,4%

UK, 4%

Canada, 3%

Netherlands3%

*Source: Linux Counter Open Source Project – 145,313 self-profiled Linux users

http://counter.li.org/reports/

** Source: Infonomics 2002 FLOSS Survey of Developershttp://www.infonomics.nl/FLOSS/report/Final4.htm

Countries that have OSS Preference PoliciesBahrain, Belgium, China and Hong Kong, Costa Rica, France, Germany, Iceland,

Israel, Italy, Malaysia, Poland, Portugal, Philippines and South Africa.

Legislation pending:Argentina, Brazil, Bulgaria, Chile, Colombia, France, Italy and Peru.

Linux Usage*

An interesting thing happens when anybody can improve software

It gets better. Naturally.Debugging by over 800,000 developers all over the world.

Improvements from anywhere, in minutes instead of years.

Open source products are naturallyopen to working with other open source

products.

They’re all modular. Like 2 x 4s and roof shingles.

Yet each product grows out of its own development community.

And it’s not the job of each community to make sure its products work with the products of every other community.

Which means…

X

You don’t always know what works with what.

When one version of one product changes, what happens to all the dependencies?

Does one dependent app get hosed by a patch that fixes another dependent app?

DIY testing is an open source tradition.But in large IT shops, it can get mighty time-consuming.

??

?

?

X

CIOs: I need to “just get open source products to work together.”

“We save 30% in vendor cost and waste 20% in component testing.” Dependency issues multiply with every addition, every change.

Startups can’t afford the overhead.Fortune 50 companies don’t want the expense of having teams of

people coping, rather than producing.

That’s why Ray Lane and Murugan Pal founded SpikeSource

SpikeSource: Tested, Certified Open Source Software

Founded by Murugan Pal and Ray Lane in Spring 2003

18+ months of development to create a fully-automated test bed for open source component interoperability testing

Commercial Launch in April 2005

Global Startup from Day One

SpikeSourceMaking Open Source Safe for the Enterprise™

Supports the Components

Required for Your Application

SpikeSource Core Stacks Include:63 Components

6 Platforms6 Languages

SpikeSource offers the most comprehensive and automated solution for testing, integrating, certifying, updating, and supporting open source software.

Addresses the Complete

Support Lifecycle

Fully-Automated Test Bed Provides:22,000 tests nightly across

272 parameters189 configuration files

IncreaseProductivity

Comprehensive open source

information services

Custom or 7 pre-configured LAMP/J stacks

Network / client installation

in 15 minutes

DecreaseCost & Risk

Track and manage open source assets

Updates:12 hour patch to test to

deploy

24 hour cost-effective, flexible support options

Why Go Global from Day One?

Cost ManagementCost reduction on average 1/3 to 1/10th

Global Time Zone Support Coverage24 X 7 development schedule key for competitive parity

Skills utilization“Hubs of excellence” integrated together by global economy and IT

Selling into Local MarketsNew billion-dollar market opportunities opening up …

SpikeSource Offshoring – Selection Process

Feb 2004: Extensive RFP Process Deliverable Requirements

Creative Thinking

Key Criteria:People Quality

Executive Vision for Open SourceCustomer References

Decision: CognizantCEO Mandate for Open Source Leadership

Proactive Advisor to Customers for cost savingsHigh rate of customer satisfaction

Results: Early Success

Our internal engineering operations replicated within six days

Delivered three releases in one year

Several projects initiated completely by Cognizant team

Together, we are offering compelling cost savings to customers

60+ engineers are becoming experts in open source and SpikeSource tools

Challenges in Going Global

Distributed Management TeamRequires flexible, loosely coupled management approaches

Must help your business partners to hone their skills and capabilities

Identifying skills, enabling infrastructure

And, Differentiation must come from new placesYour competitors have access to the same global resources that

you do – differentiation must come from How vs What you do

When commodity components become cheap and abundant, innovation moves to

process automation

Optimizing every step in the supply chain becomes the competitive differentiator.

Going Global is Key.

Like open source, 21st century companies will be designed to be inherently modular

Innovative

Specialized

Loosely Coupled

Optimized for Partnering

Process automation + modularity enablesspeed to market

In ONE Year:Linux-based email firm grew to 60 customers, providing an

alternative to Exchange

“OVERNIGHT”

One India-based testing company grew to $30M in revenue

ONE College StudentLed development of the first development of a Tamil version of

Mozilla . . .

. . . There are over 80 million Tamil-speaking potential customers!

Taking advantage of commoditiesis the biggest opportunity

— for everybody who wants to be a natural resource…Or to build a business on them.

So: where’s this all headed?

No application, or business is beyond commoditization.

Portals

JetspeedAxisStruts

J2EE & Web Services Apps

ERP, Transactional Apps

LuceneeXistOpenLDAP

Open Source Adoption

Application Complexity

File Servers

Mail Servers

Self Service Apps

CRM, Collab Commerce

Linux Apache TomcatJBOSS

PgSQLMySQL

ALL

Catalogs and Websites

SOA FeaturesOS Web Server App Server Database Stack

Data Center Management

Building an Open CompanyLeveraging the “Three O’s”

Offshoring

Outsourcing

OpenSourcing

All of which means we’ll need to adapt to life in a world exploding

with new opportunities