
One of the interesting things about covering the open source software space is that it is still an emerging market. Particularly in areas such as services and systems integration, where most of the leading Western providers have been limited in their response to open source to date, the market is potentially wide open for challengers from other parts of the world.
This morning I had the opportunity to meet up with SIOS Technology, which probably won't mean a lot to many people reading this. That's no surprise - until November 6 the company was known as 10 Art-ni. In May this year it agreed to acquire a company you may well have heard of - Linux high availability software vendor SteelEye Technology.
While the SteelEye name survived the initial re-branding of 10 Art-ni to SIOS, it will eventually be phased out as the new company looks to make a name for itself as a global provider of open source software and services.
"At the moment it is six months after the merger, it's a learning process still, but how to grow the business internationally is my target," explained Tomofumi 'Tommy' Gotsubo, SIOS's senior vice president of international business. While the SteelEye subsidiary currently represents the vast majority of that international business, SIOS is looking at its opportunities to make use of its Linux engineers and support expertise outside Asia Pac.
As 10 Art-ni the company already had relationships with Red Hat and JBoss, as well as Black Duck Software. Gotsubo said the company is now looking at ways to boost its product portfolio based on open source software, with one target area being internal collaboration.
"It [the SteelEye acquisition] is a pretty big investment for us, compared to the size of the business," he said. "LifeKeeper is our biggest internal R&D product. There are many small projects. In comparison to the revenue from LifeKeeper, their revenue is not really good enough," he added.
SIOS stands for Software for Innovative Solutions and is representative of the fact that the company wants to be seen as a product and services provider, he added. "10 Art-ni has a good history in Japan, but in order to grow globally we decided to change the name," he said, noting that the company is looking to emulate some significant players with its new brand. "We are aiming to be like a Sony," he said.
That might be a long-term target, but given the relative immaturity of the open source services and systems integration market, the opportunities are there, especially given the relative lead Asia Pac and Europe has over the US in terms of open source adoption.
An example comes from the take-up for SteelEye's LifeKeeper high availability software. According to SteelEye EMEA director, John Banfield, more than 90% of its business in central Europe is on Linux, with the rest on Windows, while in Japan the business is primarily Linux based. The UK, like the US, is much more 50/50.
SteelEye's president and chief executive, Paul Adams, explained: "Japan has really led the deployment in the Linux world. Europe has been leading the charge in terms of re-deploying business applications to Linux. In the US, new applications have been migrated to Linux, but these don't have the same requirements for high availability."
Following the purchase of SteelEye, further acquisitions could also be in the works, although they will be opportunistic. "It's not an acquisition trail per se," said Adams. "We'll do mergers and acquisitions where it makes sense."
According to Gotsubo, growing the business is primarily about partnerships rather than acquisitions or new products. "we are trying to further our partner relationships in order for us to grow, " he said. "That's the main goal."