Many a successful startup owes its creation to a wild gamble that paid off. Think about Andy Bechtolsheim's $100,000 bet on Google, a promising search company that didn’t even have a bank account yet.
In the case of Hyperic , an open source software management vendor, the initial bet was somewhat smaller: $1, but the risks -- and the rewards -- were still huge, according to Javier Soltero, Hyperic's CEO and co-founder. But, three years later, Hyperic is in the vanguard of open source companies that are targeting the enterprise market, with a fast growing company and technology that's positioned to shake up a systems management space dominated by much larger firms.
Hyperic was born under Soltero's guidance at enterprise open source vendor Covalent, where the software was developed and sold as a Web management solution in 2003. After finding some success with the Hyperic technology, however, Covalent found itself with some high profile and demanding customers, but a business plan that was focused on the Apache platform and didn't have room for a charge into systems management.
That's when Soltero, who had been chief architect of the product at Covalent, stepped up with a team of engineers and offered to buy the technology from Covalent. The cost was all of $1 -- not a bad deal, given Soltero's estimates that the commercially available product consumed $15 million of R&D. It wasn't all that simple, however: in exchange for the Hyperic technology, Soltero and his team agreed to assume liabilities for the three enterprise accounts that were using the technology -- all of them marquis accounts that his fledgling company couldn't walk away from.
But Soltero believed in his vision for the Hyperic platform, and he had a plan that went beyond salvaging three enterprise accounts. After spinning off Hyperic on March, 2004, Soltero and his team spent the next two years bootstrapping to turn the Hyperic software into Hyperic HQ, a management tool for use in modern datacenters that could do system monitoring, trending, and analysis in environments where SOA (service oriented architecture), virtualization, and composite applications are the norm.
Open source figures heavily in the Hyperic platform, which is written with Java and runs on JBoss and Tomcat. The software currently supports Oracle and the open source PostgreSQL database. Support for MySQL is due out in beta this summer, with an official release in the fall, Soltero said.
The team decided on a new business model to sell it that was very different from Covalent's traditional enterprise licensing model. Soltero calls it "rapid adoptability," and it hinged on getting as many people as possible to get comfortable using his company's technology.
To make rapid adoptability a reality, the Hyperic team made the bold decision to give the crown jewels away: turning Hyperic into a freely available open source product, and banking on the virtuous cycle of community involvement and demand for high-end tools and plug-ins to make Hyperic a success and keep his company afloat.
"We wanted to go to market and build a community around this product," Soltero says.
Today, Hyperic offers Hyperic HQ and SIGAR (the System Information Gatherer and Reporter), under GPL licenses. Together, the tools make up a Web infrastructure management platform for small deployments. On top of that, the company sells product support and enterprise extensions that allow companies to use Hyperic with large deployments to automate monitoring and control tasks. A separate PDK (Plugin Development Kit) allows developers to create application- and device-specific plug-ins for Hyperic HQ using a Java/XML UI, also available under GPL.
Since launching in July 2006, the Hyperic product has been downloaded more than 75,000 times and Soltero knows of more than 1,000 production deployments of the product, including accounts like eHarmony.com and Ogilvy & Mather. The company's average deployment is 25 systems, and its largest deployment manages around 600 physical machines and 30,000 metric collections a minute, Soltero said. Since launching, Hyperic has also grown from a five-person startup to a 30-person operation with 250 customers, as well as OEM partnerships with firms such as JBoss and MySQL.
But Soltero's even more enthusiastic about the "bottoms up" involvement of Hyperic developers in the open source community, who collaborate on company-sponsored forums and have already provided numerous plug-ins for platforms such as the Asterisk Open Source PBX and Memcached distributed memory caching system.
"In one case, someone wrote a plug-in to a technology that we're wholly unfamiliar with," Soltero notes. "If Hyperic had to procure the hardware and software technologies to keep up to date, that would really slow us down.”
The active and hands-on discussion and feedback among users and Hyperic about the platform gives his company an edge over incumbent systems management vendors such as CA, IBM and HP.
"It's the clearest evidence that this could be disruptive to the systems management vendors," Soltero comments. "Here you have this large-scale community of sysops who are sharing the results of managing large environments and discussing what works and what doesn't."