Sonatype's Open Source Boost To Software Productivity
Published: April 23, 2012 13:53
It seems like a contradiction in terms — open source software is by definition created for free by coders who want to make a name for themselves writing components that organizations use at no charge. So how could one company come to dominate a world where the product is made and bought for free?
If you’re Jason van Zyl, co-founder and chief technology officer of Sonatype, you know that the answer comes from his seminal role in creating Apache Maven – a tool that lets organizations manage a systems development project’s build, reporting and documentation.
As van Zyl explained in an April 20th interview, Sonatype gets 4 billion request per year, has 9 million developers, and is used by 300,000 companies. Through its Central Repository, Sonatype has become the industry standard website for clumps of Java and .net code that perform most of the functions needed by systems developers — such as creating reports.
Central is a key asset because it gives Sonatype “unique visibility into how and what components are being downloaded by organizations — this includes insecure components that could put organizations at risk.”
And one of Sonatype’s early customers was TurboTax maker, Intuit (INTU). Before Sonatype, Intuit’s development projects used different project management tools for its internal projects and those that resulted in consumer products, such as TurboTax. By standardizing its project management on Sonatype’s Maven, Intuit boosted its software development efficiency.
Sonatype is free for the majority of its users. But it does have three ways of generating revenue: technical service, training, and licensing a so-called enterprise grade version of its software. Van Zyl believes that the feedback he gets from companies that do not pay Sonatype for its software is extremely valuable.
And the combination of high quality software that’s comprehensive and free to most users helps explain why Sonatype has become the dominant player. But in developing the software, van Zyl has gotten help — including $16 million raised in two rounds: a Series A in early 2008 and a Series B round 18 months ago from investors including Hummer Winblad Venture Partners (HWVP) and Accel Partners.
Partner, Ann Winblad, explained in an April 13th interview, that she saw Sonatype as a technical leader when HWVP decided to invest. However, she concluded in the second round that van Zyl — while a “rock star developer” — could only do part of the job needed to expand the Sonatype.
And as van Zyl told me, he changed his view on the importance of sales people. Initially he was quite skeptical but he saw the company burning through cash and not getting any closer to being able to sell its products.
So van Zyl – realizing that he lacked the sales skills needed to build the company – agreed to hire a CEO with the technical know-how, sales ability, and a successful start-up building track record.
After interviewing and rejecting 18 previous candidates, van Zyl hired Wayne Jackson– who led intrusion detection software maker, SourceFire (FIRE), to a 2007 IPO and in 2000 sold mobile infrastructure maker, Riverbed, for over $1 billion — as Sonatype’s CEO. Nearly two years later, van Zyl believes that Sonatype is on track to become a public company in part due to the combination of his engineering skills coupled with Jackson’s CEO capabilities.
Sonatype is going after a piece of a big market for developer productivity tools. Specifically, van Zyl noted that the company is targeting a $40 billion market that encompasses three “enormous markets: developer productivity tools, IT governance, and IT/Operations software.”
And while Sonatype faces competition in some of these segments, van Zyl believes that its advantage over them is that unlike Black Duck or Coverity, Sonatype can link developers to software components within the Central Respository and make sure they have the latest versions and licensing information.
And van Zyl wants Sonatype to stay on the path of building software that improves the integrity of the software development supply chain. By continuing to realize that vision, he expects Sonatype to complete an initial public offering by 2017.
And if Sonatype can grow fast and generate a profit in the bargain, investors may be quite happy to buy those shares.