Aria Systems: Open source in the corporate door, out the employee door?

I spent some time the other day talking with Ed Sullivan, CEO and co-founder of Aria Systems. Aria is a software-as-a-service (SaaS) billing and customer management company with an interesting raison d'etre: Ed nearly lost all his gear in an online game when the system couldn't process his payment. He figured there must be a better way to do billing. He was right.

The company, which has raised $4 million from Hummer Winblad, perhaps points to ways in which SaaS companies - which often skim the cream from open source without giving commensurate value back - can serve as good open-source citizens.

First, though, I found it interesting to hear how Aria does particularly well serving its own breed of user:We specialize in recurring business models. Compared to NetSuite, we don't do inventory management all that well. So, Aria is very strong in gaming (video games, not gambling) and in servicing other SaaS companies (i.e., if you can meter it, we can help to monetize it). We can get customers up and running in a matter of hours, in many cases. More complex integrations take more than a couple of hours, obviously.

It immediately struck me that the stars are aligned for a company like Aria, given the shift toward services-based business and accompanying subscription models. Ed concurred:

The industry's trend toward subscription models absolutely works in Aria's favor. This is particularly true because of the executive make-up of Aria. We're operators who happen to know software, as well. We built our software to go horizontal based on our experience running one of the US' largest ISPs. If you're going into a long-term revenue model business, things like expiration dates on credit cards (plus storing the credit card info in the first place), keeping in contact with customers, etc. all become critical to manage. Most don't really think through the good and bad use cases for a recurring business model. We can help because we've been in our customers' shoes. We still are.

All interesting, and all very promising for Aria. But I had heard that the company credited open source with providing the foundation for its success. What of that?

We're completely LAMP based. This allows us to really scale. We just passed our millionth end user and billionth transaction last quarter. LAMP allows us to scale very cost competitively. It also allows us to let our customers scale non-linearly.

We don't officially contribute code back to open-source projects as a company, but our developers do contribute to open-source projects on their own. We don't have an official policy that gives developers work time to write open-source code, but they do it as part of their work.

I suspect that a lot of this happens in the SaaS world. It would be better, in my opinion, to have an official company policy encouraging open-source development. Where much is given, much is expected. SaaS companies are basically open-source companies with a veneer of IP to provide added value. Given the importance of the foundation, it would be wise for SaaS companies to proactively contribute to the open-source projects that give them the scale and robustness that Ed described to me.

Still, I imagine that many a SaaS paycheck goes toward writing great open-source code, even if it's not officially allocated for this purpose. The developers seem to know on which side their bread is buttered.