A California upstart says the open-source business model makes sense for network monitoring, a services-intensive area.
An Emeryville, Calif.-based start-up called GroundWork Open Source Solutions on Monday launched an updated open-source software package for monitoring corporate networks. The company's offering, dubbed GroundWork Monitor version 3, includes a product called Nagios, as well as a number of ancillary tools to ease installation.
Those tools include improved Web-based configuration and monitoring software, as well as a set of prepackaged reports for gathering data on network performance, according to company executives.
GroundWork, which in May secured $3 million dollars in initial funding, has mimicked a popular open-source business model, in which customers pay for services for a freely available open-source product. Red Hat, which sells a subscription service around the base Linux operating system, is the most prominent company that uses the model.
GroundWork licenses its software and sells network design and configuration services.
A commercial open-source approach is particularly appropriate for the network-monitoring field, because there is little differentiation among products, and installation demands a high level of expertise, according to company executives.
"In this particular market, the software really is a commodity--they all do the same thing. What matters is the process and architecture of how you deploy it," CEO Robert Fanini said.
Fanini expects management software, a field with dozens of established providers, to follow the path of other software categories. Increasingly, corporate customers are purchasing open-source versions of operating systems, databases and application servers as a way to reduce costs.
By basing its own products on a freely available package, GroundWork can undercut entrenched management software providers on price, Fanini said. There are dozens of well-established management companies, including heavyweights Hewlett-Packard, Computer Associates International, IBM and BMC Software.
GroundWork has estimated that its licenses and services, in some deals, are priced at 20 percent of comparable monitoring products, Fanini said.
Company executives said GroundWork Monitor is competitive with existing commercial products, but its main competition is from customers who download the Nagios software and do not choose to pay for service or added features.
GroundWork has about 25 customers and is primarily targeting midsize companies. The average selling price is about $50,000.