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9/28/2004
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Former BEA Execs Launch Open-Source Startup

SourceLabs aims to provide certified, reliable infrastructure for enterprise applications.

It appears something positive has emerged from the recent mass exodus of executives from BEA Systems.

On Tuesday, three former BEA executives, with the help of two venture-capital heavyweights, launched a new company aimed at providing fully supported and certified open-source infrastructure software for running enterprise applications.

Dubbed SourceLabs, the new company is led by CEO Byron Sebastian, Vice President of Sales and Marketing Cornelius Willis and Chief Architect Will Pugh. Willis said the Bellevue, Wash.-based startup is angling to be the Dell of open-source software, distributing a combination of products rather than building its own.

SourceLabs will take existing open-source infrastructure software above the operating system layer--such as database, application server and portal products--and then put together and certify a stack for a specific scenario, such as to run a CRM system, Sebastian said. The company also will sell support and maintenance for that infrastructure on a subscription basis.

Besides its management team, all of whom left BEA earlier this year amid the software vendor's organizational turmoil, SourceLabs has some impressive VC backers. Brad Silverberg of Ignition Partners and Danny Rimer of Index Ventures have joined SourceLabs' board of directors, and together their VC firms contributed $3.5 million in funding to the startup.

Silverberg ran various businesses at Microsoft, including Windows, as a senior vice president before forming Ignition Partners. Rimer was the underwriting analyst for some large companies that surfaced during the dot-com era, including CNET, Netscape and Amazon.com. More recently, Index Ventures has provided funding for open-source database firm MySQL.

Sebastian, who left BEA in January, called SourceLabs' strategy a way to provide "dependable, open-source systems" to customers that want one throat to choke for support and maintenance of open-source software stacks. He said he got the idea for SourceLabs by asking about 60 industry experts why open-source software, aside from Linux, wasn't being used broadly in enterprises. His discovery: Customers face a choice of buying proprietary software and being locked into a particular vendor for support and maintenance, or cobbling together open-source systems from a variety of software and calling several companies or searching list-serves for support when there's a problem.

SourceLabs wants to give customers a third option, one that Sebastian thinks will make open-source more prevalent in the enterprise. "We want to provide open-source systems that have been preintegrated, tested and certified so that if something goes wrong, they have one number to call," he said.

To that end, SourceLabs doesn't plan to build its own software from the ground up, though it will be contributing technology to the open-source community, Sebastian said. Instead, the company aims to partner with leading open-source developers such as MySQL and JBoss Inc., which would provide the technology for its certified and tested software configurations.

"We're not going to reinvent any wheels," Sebastian said. "We will partner with some of the commercial vendors. We think there's a wide variety of open-source software out there, and we will be using that."

SourceLabs' strategy is similar to that of Atlanta-based JBoss, which provides maintenance and support for a host of open-source infrastructure. The main difference is that JBoss built the software it supports and, in fact, gained momentum because developers liked working with the JBoss application server.

Whether SourceLabs can earn the same kind of industry credibility remains to be seen, said James Governor, principal analyst at technology research firm Red Monk. "At the moment, there's no reason [SourceLabs] has the credibility or authority to drive this model," he said. "JBoss had the authority because a bunch of people deployed their product."

Still, SourceLabs has a fighting chance of winning customers and accomplishing its mission because, out of the gate, the company has "bright people that have had successes with software companies in the world" on its side, Governor said. "It will be interesting to see how it plays out. A lot is going to depend on the relationships they build with other open-source players," he said.

SourceLabs' management also recognizes the importance of such relationships and is hard at work building partner relationships to help get its business off the ground, Willis said. Once those partnerships are secured, SourceLabs' first offerings will provide software infrastructure for "a small number of business scenarios" that are popular among business customers, Sebastian said. Those scenarios might include infrastructure to run a CRM system or to serve Web content. SourceLabs hopes to have beta versions of the first certified software stacks available in the next six months, Willis said.

Martin Mickos, CEO of MySQL, said that if SourceLabs is successful, it would provide a new opportunity for open-source vendors like his company to distribute software to customers and compete more effectively against proprietary vendors such as Microsoft, IBM and BEA. But more important, SourceLabs' certified software could help convince customers that open-source is reliable option for the infrastructure that runs an entire business, he said.

"The main value here is not giving proprietary vendors a run for their money--although that may happen--but giving enterprise customers a dependable and complete open-source infrastructure," Mickos said.

In addition to partnering with ISVs such as MySQL, SourceLabs also plans sell its services through solution providers, which should be attracted to the company's use and support of open-source software, Willis said.

"We anticipate that we'll be selling support contracts through ISVs and systems integrators because these folks are putting together systems for customers," he said. "And it's a much more customer-advantageous deal if they build them on open-source infrastructure."

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