Open-source firms MuleSource, Zmanda net extra funding

Two open-source vendors, MuleSource and Zmanda, announced Series B investment rounds, which they'll use to expand their businesses

Two open-source companies had reason to celebrate Tuesday as each announced more venture capital funding to grow their businesses.

MuleSource, an open-source provider of infrastructure and integration software, raised US$12.5 million in its Series B funding, adding to its initial US$4 million round of investment from October. Meanwhile, open-source data backup and recovery specialist Zmanda attracted US$8 million in its Series B funding, building on an earlier initial venture capital investment of US$5 million.

MuleSource plans to double its workforce from 25 to 50 employees during this year to increase the number of sales and support staff backing up its open-source enterprise service bus and integration software. The company will also set up a formal partner program.

The startup hasn't used much of its initial funding and sees the extra capital as more of a cushion to go out and expand the market for its software, according to Dave Rosenberg, MuleSource CEO. With the increased funds under its belt, the company is better positioned to respond quickly to changes in the market or to potentially acquire a small open-source project, he said.

MuleSource expects to release a beta version of its Mule 2.0 middleware in the third quarter, with new functionality including more enterprise clustering and improved support for repositories. The startup has more than 20 paying customers and over 1,000 enterprise production deployments of its software.

While some customers are turning to MuleSource to replace custom software developed in-house, the company also finds itself competing regularly against Tibco Software and Oracle and sometimes BEA Systems.

Zmanda wants to expand sales and marketing and development staff to support the growing number of commercial enterprise open-source products it offers, according to Pete Childers, CEO of Zmanda. The company has about 30 staff, split evenly between its Sunnyvale, California, headquarters and its development and support operation in Pune, India. Zmanda is also keen to continue broadening its range of backup and recovery software to encompass more application-specific offerings.

Microsoft's recent saber-rattling moves against the open-source community may ironically end up as more of a rallying call than having a chilling effect on open-source adoption, according to MuleSource's Rosenberg. Last week, the software giant asserted that Linux and other open-source software infringe on 235 unspecified Microsoft patents and said its preference was to resolve any potential issues through licensing agreements, not in the courtroom.

Just like The SCO Group's intellectual-property (IP) litigation against IBM, Novell and others united the open-source community and brought concerns about IP to the fore, Microsoft's latest salvos about patent infringement may have a similar effect, Rosenberg argues. "There are obvious advantages in open-source, but it's basically about solving a problem and being in control," he said. "I don't see how proprietary vendors let the customer be in control."

Although some Microsoft executives are making overtures to the open-source community, the company's monopoly position guarantees "they want to crush everyone," he said. "Their goal is not a positive outcome for open source."

By contrast, Zmanda's Childers describes himself as more of a "glass half full guy." He pointed to Microsoft's Open Source ISV Forum, which took place Monday in San Francisco and ran in association with the Open Source Business Conference in advance of that event occurring Tuesday and Wednesday in the same location.

"Microsoft needs to reach out to the open-source community and seems to be doing so," Childers said. However, he added, "Open source is going to be successful with or without Microsoft or any other proprietary vendor. The FUD [fear, uncertainty and doubt] spread by other proprietary vendors seems to bounce off open source."

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