“I had the idea to create collaborative software that combines aspects from software systems such as wikis, version control systems, issue tracking systems, and mailing lists,” Trieloff says. “I was accustomed to using these tools, and I found it irritating that collaboration outside of the software development industry did not work. [At one job,] after spending a week setting up version control, wiki, and bug tracking, I was frustrated, because I could not convince my co-workers to use these tools, no matter how productive we might have been. Their complexity and power made them nearly unusable.”

That’s when he got the idea for Mindquarry. Mindquarry is open source, collaborative, and easy to use, says Trieloff. It’s designed to remove the usability barrier.

After the usability barrier comes what Trieloff calls “data lock-in. We allow our users to cross this barrier by offering an open REST API and standards-based storage. The third barrier is lock-out of users due to restrictive proprietary licenses. With our participatory open source model we are tearing down this third barrier.

“My original idea was not to make [it] open source,” he says. “I already had gathered experience as a user, contributor, and developer in open source, but had not thought about the business opportunities in open source until my co-founders Alexander Saar and Alexander Klimetschek and our investor pointed me in this direction. It then became obvious: what the world needs is not only better software for supporting the teamwork of knowledge workers, but that in order to make the software useable by everyone, we had to remove all barriers.”

Trieloff says he’s on the pragmatic side of the open source philosophy. “We are offering open source, not because I believe software must be free, but because I believe it is the best option for customer and vendor,” he says. “Since the late 1990s I have been using open source software. My first real open source software was PHP3 and MySQL. I chose them not because they were free, but because they gave me options to develop software that other proprietary systems did not have. This, of course, was a result of freedom, but freedom was not what made my decision.”

Mindquarry will generate profits through a subscription model through which customers receive maintenance and support. “For our enterprise customers this removes another barrier: uncertainty when dealing with community-created software.” Mindquarry is also available in a hosted version where small companies can, for a fee, take advantage of a pre-installed version of Mindquarry that resides on remote servers.

Trieloff says the idea of community is the most important aspect of launching a business based on open source. “If you are using open source software internally on mission-critical systems, or starting a company on this software, make sure to be involved in the community,” he says. He also cautions that “the community that creates large parts of the software must be understood to keep your requirements and the development in sync. Without your contribution, the community will hardly create the software you need.”

arla Schroder says she just “kind of wandered into” her current life as a free software advocate and well-known IT journalist. “I don’t have much in the way of formal education. But I’ve always been mechanically inclined – your classic ripping things apart and figuring out how they work. I think that makes open source a natural fit for me.”

Schroder didn’t study computers or programming in school. She found formal education “horrible and boring,” and says she couldn’t wait to get out. Once she did, Schroder embarked on a curious path that led to her role as the managing editor of LinuxToday.com. “I’ve had a lot of different careers. I started out as an auto mechanic, and that lasted until cars got all computerized, and then it’s hard to stay in business” because of extensive and expensive equipment needs. Next up for Schroder were stints in landscape maintenance and housecleaning. “I got bored with that,” she says. “I seem to last about six years.” Then she learned massage therapy. “I was getting beat up doing that landscaping work.”

In the early 90′s as a massage therapist in Portland, Oregon, Schroder found that most of her clientele were people involved in the high-tech industry. “They were all getting repetitive strain injuries. That was my introduction to computers. Before that they just hadn’t been on my radar. Then a friend loaned me her Macintosh LC-II. That was my very first computer. And it was fun. But there is something about the Apple way of doing things. I was like, ‘this is OK, but not really satisfying.’ Next was a Windows 3.1 PC. 3.1 was pretty much a fiasco. I was always dropping to DOS to get any work done. But that was more fun, getting under the hood.”

Carla SchroderWhile still a massage therapist, Schroder starting writing a regular column entitled “Happy, Healthy Computering” for a local computer publication called Computer Bits. That was the beginning of Schroder’s career as a journalist. She soon tired of writing about health and started writing about her newfound hobby: computers, and eventually open source software.

“I started gravitating toward Linux then because there were a couple of Linux writers at the magazine. I also started helping people with their computers – home users and small businesses. As soon as people know you can do anything with computers they start waving money at you. But [consulting] is stressful and demanding.” So Schroder focused more on her writing.

“On this one mailing list, one of the editors at Jupitermedia posted that he needed a technology writer. I was all over that,” Schroder says. “Michael Hall opened lot of doors for me. I’d been freelancing for various Linux sites on Jupitermedia Linux since 2002, writing nice gnarly Linux howtos of all kinds — desktop, system, and network administration. I also substituted for Brian Proffitt, the former managing editor and mastermind behind Linux Today and LinuxPlanet, when he took time off. Then Brian got a fantastic opportunity to work as the Linux Developer Network community manager for the Linux Foundation, which is the group that pays Linus Torvalds’ paycheck. So I said to the Jupitermedia bosses ‘Me! Me! Pick me!’ And after keeping me in suspense for a dreadfully long time — it was like days — they said OK. Which all goes to show how business networking really works. It’s not about going to events all full of strangers, and you wander around giving sales pitches about yourself and handing out business cards. It’s about looking for opportunities, cultivating relationships, and targeting the businesses that you really want to work for.”

Schroder says her new position as managing editor of LinuxToday.com is “pretty cool. I’ve been reading it since its inception. For the first time I get to read all the news and howto articles I want to, on the clock. It’s great. And I get to share the really cool ones with all our readers.”

Schroder sees her role in the FOSS community as anything but stereotypical. Instead, she identifies with other women in the open source world who are not your typical “hard core coder geeks who just want to put their heads down and not have to deal with people.

“There’s a multitude of jobs to be filled in the open source world that are every bit as important as the coding. People need outreach and need to know what’s available to them. I’m always into doing the hardcore howto’s. I take pride in not skipping over the hard parts — I don’t think there’s much point in putting out something kind of wimpy.”

Schroder says she admires FOSS hero Richard Stallman. “The man is brilliant. A lot of people don’t really understand how important and influential he’s been for the whole issue of freedom – the freedom to tinker is a good way to look at it. The GPL itself is a work of genius because it guarantees there’s going to be an ongoing ecosystem. People who take and modify this great code that’s been given to them? They’re going to have to give a little something back.”

Schroder hopes to take her message, that FOSS is for everyone, to the masses. “One of my biggest dreams, and this has been hard to do, is to reach out to a more mainstream audience. There’s all kinds of avenues for the geek crowd. The growth now is going to have to come from the so-called masses. I would love to find a way to get into more mainstream publications and start from a more fundamental level, to reach those raw baby beginners who have never had the opportunity to learn about Linux.”

ReadyTechs provides network support services for companies that don’t want the expense of hiring and caring for their own employees. Now CEO Gerry Libertelli says the company is using Linux virtualization to open a new income stream based on cloud computing.

Virtusa, an IT services company founded in 1996, was using proprietary version control and collaboration systems to develop software for its clients until Sri Lankan founder Kris Canekeratne decided that a custom solution built on open source components was a better fit for internal use. As a result, the company ended up saving millions of dollars on licensing fees and acquisition costs.

Jackson wanted to keep Sybase, in part because of the familiarity factor. “We looked at other databases like MySQL and SQL Server for Windows, and even considered just upgrading Sybase and running Solaris again. It made sense financially and from an ease of implementation standpoint to stay with Sybase, but with a much more current version running on Intel and Linux.” While MySQL is free, Sybase allowed Western & Southern to port its current licenses to the new infrastructure. Besides, MySQL didn’t pass Jackson’s evaluation with flying colors. “It just wasn’t good security-wise,” he says. “It’s not even close yet. It was missing a lot of the functionality that we needed.”

Even though MySQL didn’t pass muster, Linux was just fine. “We took Linux through the trials. We installed, we tested, and made sure everything matched up the way we expected it to. We had big concerns on the database side — moving the data is pretty easy but the key is the code. Anything that has database-specific code in it is a concern when migrating. By staying with Sybase, we didn’t have to rewrite the code, and that saved us hundreds of hours.”

Western & Southern reports an 80% decrease in batch cycle times on the new database servers running Linux, as well as a 60% reduction in the number of servers needed, which further reduced both hardware and software license costs.

Jackson’s biggest challenge with migrating to Linux has been version matching. “It becomes kind of sticky with all the different pieces. Versions are changing so fast now, you have to make sure vendors match the version between the database, the applications, and the operating system.”

Jackson’s experience with Linux has been so good that the company is now looking at other areas in which it could use the open source operating system. “I can’t say a whole lot about it, but we’re looking at some open source Web technologies and workflow software, and some other things.”

For other IT directors looking at migrating to an open source platform, Jackson recommends thorough testing. “They’ve got to be able to have a good test bed,” he says. “It helps to have a good understanding of how the application functions as it is now, and will it be able to bring the functionality you expect. That goes back to having people who are familiar with the application and how it will work. Especially with a database, it’s good to have people who can understand the code. Being able to play with it and experiment and get comfortable with it yourself, before you commit, is key.”

Compellent’s SAN appliance, called Storage Center, works from a GUI console that manages servers in any location using a “wizard-based” interface. Storage Center automates most of the tasks that network managers typically have perform manually, most notably the task of “tiering,” or deciding where in the SAN to store certain classes of information to create the most efficient system of data storage possible. Most of the time, data is classified according to the frequency of access, with data that is expected to be accessed less frequently stored on lower performance, less expensive drives, and more frequently accessed information stored on high performance disks. The Storage Center automates this task by placing metadata identifiers on each block of information that tell the software things like when the data was last accessed.

Guider says there was no point in starting from scratch when it came to choosing what architecture should undergird Compellent’s automated tiering capabilities. “Any smart developer knows that you want to use something already available. The operating system was the first thing we had to deal with in implementing the software.” Guider knew he wanted to use an OS with real-time capabilities to power the SAN appliance, so it could write, access, retrieve, and deliver data quickly across the network.

Guider was drawn to eCos, an open source real-time operating system, because of its highly configurable nature. He calls it an “application-specific” OS, and believes that because developers can tweak it to their apps, it delivers faster run-time performance. The fact that it is open source made it a great choice for budgetary reasons and what Guider calls “schedule savings,” because his development team didn’t have to call on a vendor to perform needed customizations.

Instead they pulled the source code, made the necessary changes to the kernel, added some driver support, “and had it up and running in a couple of weeks,” says John Veit, Compellent software engineer. Veit didn’t hit any snags with the software or with the development community surrounding eCos. Compellent had lined up distribution channels before it even began shipping its products, creating a built-in audience for the development process. “Some customers were not believing that we could have done this in the time we have done it,” Veit says. “A good part of it is due to the fact that we used the open source OS.”

Guider and Veit looked at other OS options, including VxWorks and QNX, but their colleagues recommended eCos for its stability and flexibility. “It’s not just cost,” Guider says. “I always think of engineers as a limited resource. With eCos, we used the engineers in a more productive way. This is code that has been out in the field for a long time in a variety of applications, and it is very solid. It’s a very valuable thing to have. The engineers are much more focused and we are able to have a much more robust product.”

Guider says his customer never question the fact that there’s an open source operating system underlying the SAN appliance. “We really don’t advertise what the operating system is. Sometimes people ask, but there’s never been a negative response.”

iFAX provides value-added services, support, and hardware to the HylaFAX open source facsimile server software. HylaFAX uses a client-server architecture that allows users to send documents through fax modems from any computer on the network. Nickerson says the company was “founded from the ashes” of a dotcom bust. “In 2000 I relocated from England to start this [other] company with a friend. He had something probably nobody really wanted, like many of the companies of that era. It never took off.” The company failed, but in his newly unemployed state Nickerson found much more time to work on his true passion: the HylaFAX open source project. Nickerson had been involved with the project since 1991, when it was known as FlexFax. It was his first exposure to the concept of open source software development, and he “became very enamored with the idea.” After several years of development that some said was too slow, in 1998 Nickerson was one of the community members responsible for revitalizing the HylaFAX project, when he and fellow developer Robert Colquhoun created community repository hylafax.org. After the dotcom startup died, Nickerson says he was left with a choice. “I could go back to England, or I could continue following the roots I had planted here.” He decided to make his passion into his career, launching iFAX in 2002. “That was my dream,” he says. “My goal was to build a company around this software that would allow me to pay myself and other people who had been involved: to monetize it.”

Nickerson says HylaFAX lends itself very well to a commercial business model. “We were particularly able to monetize it because HylaFAX has very clear business uses. [In the community], we were being solicited by companies all the time: ‘We’d like some support.’ But we’d never gotten organized enough. As soon as we launched iFAX, people started knocking on our door. One of our early customers was AT&T. When one of your first customers is the phone company, you know you’re doing something right.”

iFAX had such a good start that Nickerson never felt the need to solicit venture capital. “We’re completely organically self-funded,” he says. “It is our plan to remain so. Sure, it may have been a good idea to have made a bigger splash; to have come out with a larger plan earlier, but I’ve seen the dark side of VC in the dotcom era, and if that can be avoided, it should be. We already have two masters: the business itself, and the open source community. We can’t have a third.”

Nickerson considers that second master, the community, to be an indispensable part of the success of the company. Other entrepreneurs building a company on top of open source software should do the same, he recommends. “Be true to the community. Be transparent in what you do — 100%. Make it very clear to people that you won’t do anything anti-community. It’s in your best interests to make sure that the software improves and is very healthy, so don’t do anything to jeopardize that. It’s very easy to fall into the trap: let’s build some special sauce and sell that. That’s the way the proprietary software industry works, but it doesn’t map well onto an open source community. It generates hostility and they will leave you.” Instead of creating proprietary add-ons, create superior service, he says. “In our situation, we’re lucky enough to have a large line of hardware along with the software.”

The biggest challenge Nickerson faces with iFAX is one that many entrepreneurs experience: a lack of balance between work and the rest of life. “It’s especially difficult when you’re doing it in the open source software industry because there are no business hours in open source development,” Nickerson says. “They’re global. People do it whenever. It’s usual to see people all over the mailing lists on the weekends. I do it. Several of the employees do it. Nobody asks them to, but it is what we believe in — it is our passion. So it’s very difficult to maintain balance. If you talk to my girlfriend, you’ll know. The needs of the business come first, and on the evenings and weekends, the needs of the open source stuff.”

One of the principles that has guided iFAX’s rapid growth is Nickerson’s belief in “win-win” scenarios. “Open source just allows us to come in at a good price point. The fact that we can get the software exposed to businesses [in the community] and learn from them, and then contribute the improvements back to HylaFAX, is a win-win. We’re able to come in and pitch a lower cost, high performance solution, and we can do that because the software is free; there’s no line item on the quotation for software. And we come in with so many other advantages. It is open, you can modify the source, they can do it themselves. They’re not locked in. It removes a lot of barriers. It’s a great way to do business.”

Another key to success with open source is “looking to the future,” Nickerson says. “Open source project can become irrelevant very quickly, so we have diversified and taken our knowledge and built a second line of business around Asterisk, which is very similar to HylaFAX in some ways. We don’t stand still — we hit the ground running and then keep running.”

Nickerson’s number one piece of advice to entrepreneurs thinking of launching a new business based on open source software is “just do it. Try it. You just don’t know until you do, whether it’s going to take off or not.”

Switzer used to work for Unanimis Consulting, a large ad space agency based in the United Kingdom. Today, he does work for them through Openads. Unanimis, Switzer says, is very much like Federated Media. It represents publishers such as eBay, Ticketmasters, and the BBC, selling Internet ad inventory on their behalf. “[At Unanimis] we realized a lot of our profits were going toward the ad-serving technology, so we decided to use an open source ad server to save money,” Switzer says. “Over the next two to three years, I made significant changes and improvements to phpAdsNew, and became the leader of that project,” while still working full time for Unanimis.

Switzer says that because he was working for Unanimis, most of the changes to phpAdsNew at that time were “solely for the benefit of Unanimis, without taking much consideration for what the community wanted.” He had a sneaking suspicion the community was much larger than just Unanimis users, so Switzer set out to prove it. “I wrote a script for Google to find out how many people had our tags on their files. It was over 100,000 domains serving hundreds of billions of ads a month. It was obvious that phpAdsNew (now known as Openads) was the biggest ad server network on the Internet.” With a community that big, Switzer reasoned, it needed to have a company backing the product up, rather than “this guy here and that guy there.” His entrepreneurial spirit jumped at the chance to create that company. Switzer soon left Unanimis in order to focus completely on expanding and monetizing the Openads project.

“The goal for Openads is to provide a platform for advertisers to be able to buy ads on publishers’ sites,” he says. “We’re taking the large community of publishers who have our software loaded, and creating ways for them to make it easy to get ads on their site. If you have a small site, you’d probably just get Google Adsense. Over time, after you start making more money, you’d probably add Tribal Fusion and any number of other ad products. Then you’d rotate them to see which gave you the most profits. As the site grows, you’d also get solicitations from advertisers who want to advertise directly on the site. That’s good, but it’s also getting more complex — which is really a barrier to entry into making real revenue. So we’re building a publisher platform that makes it easy for advertisers to click on a link, upload their ad creative, and pay automatically. We’re also making it easier for publishers to try out a number of different networks, to automatically rotate them and bubble up the network that pays the most.”

Openads derives its income from advertisers who pay for access to the ad space inventory, and from publishers who pay yearly fees for technical support, consulting, bespoke training, and custom coding, though that is on a limited basis, Switzer says, until the project can “build a community of developers that can help us out in that area.”

The biggest challenge in monetizing a large open source project has been meeting the needs of the community, Switzer says — “Trying to put together a structure so that they can have a voice, so I can really get new product ideas and direction for Openads to come directly from the community. I wouldn’t say they have been ignored, but there hasn’t been that structure. So, over the last six months we’ve spent a lot of time serving people — we’ve dedicated resources to reading forum messages and responding by building up the infrastructure, consulting with publishers, and getting venture capital investment to help with that.”

Landing $5 million in venture capital this past June has changed Openads “quite a bit,” Switzer says. “Before we had it, it was largely just me and a few developers, and so we would sit there and develop whatever we decided to and there wasn’t a lot of significant project planning going on.” Switzer says Openads purposefully chose Index Ventures to provide the majority of the funding, because “they specialize in open source and community-based products. We were very selective in who was going to give us money because the potential for taking a special project like this and overcommercializing it is there — but Index absolutely gets it. They know the value of using community to help drive forward the company.”

As part of the financing deal, Openads recruited Skype vice president James Bilefield to fill the CEO spot. “We were introduced to James by one of the investors,” Switzer says. “He’s somebody who really gets the Internet space. He absolutely got it. He really knows the value of community, and he has strong operations and management skills. It was a pretty obvious thing to bring him aboard. And by the time we were looking for a CEO I’d already known him for seven or eight months, and there was a level of trust.”

Switzer says listening to the community is the most important aspect of commercializing an open source project. “Take advice and direction from them in terms of new product features and even strategically positioning your company. We’ve not yet fully monetized Openads, and we’ve even ruled out some commercial options, because we spent a long time making sure all the features the community wanted were there. Monetizing an open source project is still an art, and there are people that understand the value of community and they understand the fact that when you’re the leader of a great project, that’s something incredibly special. Surround yourself with people who understand that from an investment perspective, and from a coworker perspective.”

POS System – MerchantOS is based on open source software. It’s web based, easy to use and affordable. At MerchantOS they make retail software easy.