SpikeSource Confidential, 2003

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The Global Startup

• Kim Polese
• CEO, SpikeSource

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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

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And in the Global Economy

• Companies Outsourcing Core Functions
• product development, manufacturing, distribution,
  support
• Countries Competing via Talent Arbitrage
• India, China, Eastern Europe, Brazil
• The Virtual Company Now Becoming the Norm

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Theres 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.

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Whats Changedthe Demand side is Supplying
itself.

• This is much more than a shift in the balance of
  power.
• Its how power now belongs to everybody.

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The big market power is now in The Long Tail.

• With software, and skills, most solutions no
  longer come from big vendors.
• They dont even come from the usual suspects.

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As Tom Friedman says,its 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).
• Were shrinking the world and empowering
  individuals.

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Credit where dueTop-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

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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

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But then the Net came along

• A whole new software and business habitat.
• End-to-end communications.
• Zero-friction sharing and collaboration.

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Soon the ecosystem filledwith a whole new breed
of software, and new pockets of expertise
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And New Ways of Doing Business

• Core vs. Context

Seamless Communication Interfaces
Hubs of Excellence
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The Net and Open Source were both built on
principles that forever changed business as
usual

• Nobody owns it
• Everybody can use it
• Anybody can improve it

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Open Source is a Global Phenomenon
Linux Usage
Source Linux Counter Open Source Project
145,313 self-profiled Linux users http//counter.l
i.org/reports/ Source Infonomics 2002 FLOSS
Survey of Developers http//www.infonomics.nl/FLOS
S/report/Final4.htm
Countries that have OSS Preference
Policies Bahrain, 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.
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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.

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Open source products are naturallyopen to
working with other open source products.

• Theyre all modular. Like 2 x 4s and roof
  shingles.
• Yet each product grows out of its own development
  community.
• And its not the job of each community to make
  sure its products work with the products of every
  other community.
• Which means

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You dont 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.

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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 cant afford the overhead.
• Fortune 50 companies dont want the expense of
  having teams of people coping, rather than
  producing.

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Thats 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

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SpikeSourceMaking Open Source Safe for the
Enterprise
SpikeSource offers the most comprehensive and
automated solution for testing, integrating,
certifying, updating, and supporting open source
software.
Supports the Components Required for Your
Application
SpikeSource Core Stacks Include 63 Components 6
Platforms 6 Languages
Fully-Automated Test Bed Provides 22,000 tests
nightly across 272 parameters 189 configuration
files
Addresses the CompleteSupport Lifecycle
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Why Go Global from Day One?

• Cost Management
• Cost reduction on average 1/3 to 1/10th
• Global Time Zone Support Coverage
• 24 X 7 development schedule key for competitive
  parity
• Skills utilization
• Hubs of excellence integrated together by
  global economy and IT
• Selling into Local Markets
• New billion-dollar market opportunities opening
  up

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SpikeSource Offshoring Selection Process

• Feb 2004 Extensive RFP Process
• Deliverable Requirements
• Creative Thinking
• Key Criteria
• People Quality
• Executive Vision for Open Source
• Customer References
• Decision Cognizant
• CEO Mandate for Open Source Leadership
• Proactive Advisor to Customers for cost savings
• High rate of customer satisfaction

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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

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Challenges in Going Global

• Distributed Management Team
• Requires 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 places
• Your competitors have access to the same global
  resources that you do differentiation must come
  from How vs What you do

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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.

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

• Innovative
• Specialized
• Loosely Coupled
• Optimized for Partnering

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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 Student
• Led development of the first development of a
  Tamil version of Mozilla . . .
• . . . There are over 80 million Tamil-speaking
  potential customers!

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Taking advantage of commoditiesis the biggest
opportunity

• for everybody who wants to be a natural
  resource
• Or to build a business on them.
• So wheres this all headed?

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No application, or business is beyond
commoditization.
Application Complexity
Data Center Management
ERP, Transactional Apps
CRM, Collab Commerce
Self Service Apps
Catalogs and Websites
Portals
J2EE Web Services Apps
Mail Servers
File Servers
OS
Web Server
App Server
Database
Stack
Open Source Adoption
SOA Features
Lucene eXist OpenLDAP
Linux
Apache
Tomcat JBOSS
PgSQL MySQL
ALL
Jetspeed Axis Struts
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Building an Open CompanyLeveraging the Three
Os
Outsourcing
Open Sourcing

• Offshoring

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All of which means well need to adapt to life in
a world exploding with new opportunities
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