STARTUP TO WATCH

Whipping MuleSource Into Shape

Having secured funding from Hummer Winblad Venture Partners,Lightspeed Venture Partners and Morgenthaler Ventures, MuleSourcecofounder Ross Mason turned what was the Mule Project into an opensource player on the fast track. Re-invigorated with new CEO GregSchott when another cofounder, Dave Rosenberg, left the company, MuleSource hasbeen ramping up its business in the wake of a recession that hasgutted some proprietary legacy players.

The Mule Project was an open source enterprise service bus (ESB) andintegration platform that gained notoriety early on. MuleSource hasadapted its product offerings in both the community andenterprise editions in the Service Oriented Architecture (SOA) andintegration space. Its core business is selling subscriptions for itsopen source infrastructure software, Mule.

That core business has been successful — MuleSource’s revenuesare rising with three successive quarters of recordbookings.

However, the company is once again getting ready to take a gamble andrelease the next major release of their open source ESB.

“We set some very aggressive goals,” MuleSource CEO GregSchott told LinuxInsider.

Project Propelled

In a sense, MuleSource’s experience is an example ofhow the open source business model should work. Mason worked in a smallstartup company after years as an engineer. He had worked for a fewbanks in London and saw that open source was emerging.

That led him to start the Mule Project and eventually roll it into abusiness venture to offer software that solved a variety of problemsintegrating communication among companies.

“Our main obstacle was figuring out, how does a successful open sourceproject become a thriving company? We answered that question throughinnovation and monetizing. We did a lot of trial and error,” RossMason, CTO and cofounder of MuleSource, told LinuxInsider.

For the most part, that plan is working. Martin made several mid-course correctionsin driving MuleSource forward. A big change in direction took placelast February when he hired Schott as the CEO.

“I looked at Greg as one who could drive strategy,” said Mason.

Adjusting Course

Much of what he has done in guiding MuleSource is about growing alarger user base, according to Schott. The company continued to changeits product line and developed an enterprise edition.

“We’ve done well as the product’s reputation is spreading. Ourchallenge is how to grow that,” Schott explained.

MuleSource is in the process of moving from being a developer’sdarling to establishing itself as a key enterprise integration player,according to Mike Meehan, senior analyst for applicationinfrastructure at Current Analysis. The company is still making moves.

“It’s moving well beyond the Web services-based integration it debutedwith, recently adding mainframe and SAP transports. It also struck akey partnership with GigaSpaces to provide high availability services,which is a performance enhancement focused squarely on big-dollarcustomers,” Meehan told LinuxInsider.

Growing Pains

In the past, open source companies have typically pick low-risk software categories.However, people are now more used to open source, so it has become applied to more mission-critical types of applications. The same thing is happening at MuleSource, Schott noted.

When he felt the number of product downloads was approaching critical mass, he decided to expand the offering.

Despite the several course adjustments, MuleSource walked a bit of atightrope then as it is now. MuleSource faces stiff competitiondespite its progress.

“In order to land those big integration projects, it needs to add thefunctionality you’d find in ESBs from IBM, Oracle, Software AG,Progress (Sonic) and TIBCO. Yet it needs to keep its barriers to entrylow, both in terms of price of and usability, because WSO2, Progress(FUSE) and Sun GlassFish are out there as capable open sourcecompetitors,” said Meehan.

Hitting the Horizon

As Schott sees the landscape ahead, itinvolves challenging customers’ understanding of data.

“The bottom tier of open source has become databases. People are nowthinking of data in different ways. So we have to expand our offeringsagain. That put us in the sweet spot in the past,” he said.

To that end, MuleSource is becoming an integration/ESB provider. Thecompany is combining the data tier and presentation tasks into layers.

“That’s our opportunity as a company to grow,” Schott said.

Avoiding Detours

The biggest challenge MuleSource faces as a small, high-growth companyis how to keep its cultural footprint intact. That involves bothproduct simplicity and user base, according to Schott.

Related to that is how does the company keep expanding its productfootprint? For that answer, Schott only has to look Microsoft forinspiration.

“We have to focus on avoiding bloat — think Microsoft Windows. So thatchallenge is to stay lean and mean,” he said.

Cultural Obstacle

Code bloat is not the only roadblock MuleSource must avoid. Incorrect pre-existing notions about open source among some consumers is another factor.

“One challenge we have been confronting is the notion that open sourceis not free software. We got quite lucky at being able to distinguishbetween community and enterprise versions,” said Mason.

On the other hand, factors that have put strain on most businesses are actually turning into opportunities for MuleSource, according to Mason.

“The shifting economy has really helped us. No one ever gets fired forusing open source. It brings savings of from 30 to 70 percent,” saidMason.

The Goal of Integration

MuleSource’s place among the integration players could be its safetynet. There is no shortage of integration work to be done, according toMeehan.

In many ways, much of modern IT revolves around integration projects.This involves getting different applications, divisions or companiesto work together, he offered.

“It’s a fertile landscape off of which a company like MuleSource canlive. It’s proven out its technology and business model, which is whyit keeps growing even in a shrinking global economy,” said Meehan.

Strategy Questions

Continuing to move MuleSource forward will keep Schott ponderinganswers to key questions. His ability to drive strategy, as Masonnoted, will be put to some critical tests.

“There’s no question MuleSource can survive or even thrive. The realquestion is how big can it be, along with whether it will remain anindependent entity. Will MuleSource start acquiring technology tobuild around its ESB business, or will it be acquired to add a strongintegration backbone to something like the new VMware-SpringSourcehybrid?” prodded Meehan.

Either way, he sees MuleSource as a fascinating company to keepwatching. Its technology will be part of the enterprise IT landscapefor a long time to come, predicted Meehan.

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