The Open Source CEO: Bill Karpovich, Zenoss (Part 14)

Perhaps the most competitive market for commercial open source is the IT management space, where open source vendors must compete with the "Big Four" of enterprise IT management, but also with the "Little Four" of open source enterprise IT management (Hyperic, Zenoss, Groundwork, and OpenNMS).

Today, in our fourteenth installment of the Open Source CEO Series we're talking with Bill Karpovich, CEO and Co-founder of Zenoss. Each of these so-called Little Four compete in very different ways, and hence it's no surprise that their respective CEOs draw different conclusions about how to compete.

Name, position, and company of executive
Bill Karpovich, CEO and Co-founder, Zenoss.

Year company was founded and year you joined it
Zenoss was founded in the fall of 2005. Erik Dahl, CTO, had been developing the software since 2002 and had a consulting services business around the product. We formed a new company in 2005 to address the malaise in the global IT management software market.

Stage of funding and venture firms that have invested
We closed a Series A round in August of 2006 with Boulder Ventures and Intersouth Partners. This followed a seed round in January of 2006.

Background prior to current company
I have been an executive at startups for the last 11 years in product management, marketing & strategy. Two of the startups IPO'ed successfully on the Nasdaq (Digex, USinternetworking). My strong arm is disruption, rolling out new products and building new markets. For example, at Digex we launched the managed web host market. At USi, we launched the first enterprise SaaS offerings. Through many years in the hosting business, I became intimate with the challenges of IT operations and IT management software. Prior to the startups, I led software architecture teams and slung code for large application projects in the telecom industry with Accenture.

Biggest surprise you've encountered in your role with your company
Our biggest surprise has been how quickly a user community can be formed. We expected it to take longer to build the community and have meaningful market penetration, but we have managed to attain high download numbers in a relatively short period of time. By way of example, we launched our project on Sourceforge in February 2006 and a year later were Project of the Month and are among the top-10 projects overall. Try that with a proprietary startup....

Hardest challenge you've had so far at your open source company
The biggest challenge has been achieving the optimal balance/integration among the "community" and "commercial" interests. The two don't always agree on priorities and strategies, and so I believe this is an area we'll constantly have to manage for years to come.

If you could start over again from scratch, what would you do differently?
Being relatively new to open source, I spent too much time early on wondering how the "the community" would respond to various actions by the project and company. I eventually realized that if we just keep the dialog open and deliver real value it all works out.

Top three pieces of advice for would-be open source CEOs

1. Choose your lawyers and investors wisely. Your attorneys need to be open source experts and your investors need to get your model;
2. Don't stop questioning and evolving. It's still an open question as to how to succeed as an open source business. Take what you can from those that have done well but keep asking the hard questions and experiment. We are all still figuring it out. Each category/product has its own nuances.
3. Community power. At the risk of sounding obvious....To achieve the disruptive potential of open source, you have to harness the power of community to create/sustain real value that the market cares about. Otherwise you are just another software company.

Bill's case is instructive. You don't have to spend a decade with open source to benefit from it. Newbies can succeed, too. What it takes, as Bill intimates, is a fair amount of humility - you have to be willing to accept that you don't know everything and therefore be willing to listen to peers, competitors, developers, employees, etc. Commercial open source is a work-in-progress. We're all still learning, which is one reason for instituting this series of posts.

Next up in the Open Source CEO Series...Mark Brewer, CEO of Covalent, a provider of enterprise-class support for Apache and other open source technologies.