Q&A with OpenLogic CEO Steve Grandchamp about helping enterprises cut costs though open source software, its new cloud offering and raising $2 million in new funding
OpenLogic is a solutions provider that helps enterprises access and make the most of enterprise software. The Broomfield, Colorado–based company was founded in 1998 and recently raised $2 million in Series B funding.
SUB: Please briefly describe what OpenLogic is, and the value proposition you offer companies.
Grandchamp: OpenLogic provides solutions that help enterprises safely and successfully deploy open source solutions, thereby getting leading-edge functionality at a lower cost.
Free and open source software is used in virtually every large enterprise, website and web application. Almost every consumer product you use—mobile phones, tablets TVs, washers, DVRS, cars—contains open source software. In addition, the exploding area of cloud computing is largely built on open source technologies. Even software purchased from large vendors like IBM, HP and Oracle likely contains open source software.
OpenLogic’s offering includes enterprise-grade technical support on over 650 open source packages as well as open source compliance and management solutions that reduce legal and business risks. OpenLogic’s new platform-as-a-service offering, CloudSwing, leverages our open source expertise by enabling corporations to accelerate the deployment of applications using open source technology in the cloud.
OpenLogic saw significant growth in past few years as enterprise IT looked for ways to deliver on business needs while operating under reduced budgets. OpenLogic has over 250 enterprise customers, including many of the largest companies in the Fortune 500 across a wide variety of industries.
SUB: Who do you consider to be your competition?
Grandchamp: Few competitors can match the breadth of our offering and the depth of our open source expertise. We see our biggest competition coming from organizations who try to manage the governance and open source support internally or with a patchwork of tools. For example, for our open source compliance offering, we often compete with companies such as Black Duck. For our open source support offerings, the alternative is for organizations to buy technical support one open source package at a time from a variety of vendors.
SUB: What differentiates OpenLogic from your competitors (or from those offering similar services)?
Grandchamp: OpenLogic is a one stop shop for managing everything related to open source use in the enterprise. That is the differentiator that is driving our growth.
SUB: Please describe CloudSwing, the product you just launched. In what ways does it compliment/enhance your other products?
Grandchamp: We looked closely at other PaaS platforms (the OpenLogic score card of other PaaS solutions can be seen here: http://www.openlogic.com/blogs/2011/07/how-open-is-open-a-paas-scorecard/). As we talked to vendors and prospects for the past 12 months, it became apparent that many of the PaaS solutions on the market didn’t offer the flexibility that application developers expect and require. That’s why we created OpenLogic CloudSwing.
OpenLogic CloudSwing allows application developers to quickly customize, deploy and operate stacks in the cloud using any open source or proprietary components. We are also unique in that we offer enterprise-grade technical support on all of the open source stacks deployed in the cloud. The end result is a “customize-to-order” PaaS solution.
CloudSwing won the Cloud Connect LaunchPad event in March 2011—beating three other finalists in a head-to-head live demo competition.
SUB: How are you getting the word out and marketing your services?
Grandchamp: The primary source for new customers is inbound leads generated by our inbound marketing efforts and our awareness activities. We are leveraging scalable, low cost marketing activities, including search engine optimization and content marketing to draw in prospects that have a need for our solutions.
SUB: How did the original idea behind OpenLogic come about? Was there an “aha” moment, or was the idea longer in developing?
Grandchamp: OpenLogic has a unique solution set and business model that has evolved over the years, but the company was founded with expertise in open source software expertise at its foundation.
There have been several “aha” moments along the way: figuring out how to deliver support on over 650+ open source projects, choosing a SaaS approach for our software solutions and realizing how our deep open source expertise would help enterprises in cloud computing.
SUB: When was the company founded, and what were the first steps you took to establishing it?
Grandchamp: OpenLogic was founded in 1998 as a consulting company that helped enterprises leverage emerging open source technologies around Java and Apache. Originally bootstrapped, OpenLogic received venture capital funding in 2005 to grow our initial product and open source expertise into a suite of enterprise products and services.
SUB: You just closed a $2 million Series B funding round. How do you plan to use the new funding?
Grandchamp: We will use the additional capital to accelerate investment in our cloud solutions and partnerships with leading cloud infrastructure providers and others in the cloud ecosystem.
SUB: Why was this a particularly good time to raise additional outside funding?
Grandchamp: We didn’t find fund raising to be too difficult. The interest in helping to bring our open source expertise into the cloud was high. In addition, due to revenue streams from our existing lines of business we didn’t need a lot of capital.
SUB: Do you plan to raise more funding in the near future?
Grandchamp: We have no plans currently.
SUB: What have the biggest obstacles been so far to building OpenLogic?
Grandchamp: OpenLogic has pioneered a new business model to creating a revenue stream based around open source software. Unlike other open source vendors, we have not focused on a single open source software package, but instead have focused on solving enterprise pain points around all of the open source software they use.
SUB: Where do you see OpenLogic in about a year from now?
Grandchamp: We plan to accelerate our investment in our CloudSwing solution, and expect to see that area of our business grow over the next year. In addition, our established revenue stream continues to grow at a strong rate. We continue to maintain our focus on serving enterprise needs around open source software.
SUB: Finally, as an entrepreneur who has successfully navigated a startup through a bad economy, what advice do you have for those just starting out?
Grandchamp: In our case, the bad economy was a boon for our business. However, it was still important to carefully monitor our business and react quickly when there were issues.
OpenLogic – www.openlogic.com