Ten Leading Open Source Innovators: Page 7

Posted February 21, 2007

Jeff Vance

Jeff Vance

(Page 7 of 10)

7. OpenAir

Location: Boston, MA

Product or service: OpenAir’s professional services automation (PSA) software helps project-based organizations quantify the nature of each engagement in terms of the resources needed to complete the project and the final value to the organization’s bottom line.

Why it’s innovative: PSA tackles one of those difficult to quantify business processes and attempts to make it measurable and open to automation. How exactly does a service organization measure a project? Simply clocking the time people spend doesn’t capture the full extent of the project, especially when time spent on a less valuable project may impact one of a higher value, nor does time tracking help with planning.

What’s most interesting about OpenAir is how much its value increases when used within an application ecosphere. Delivered as a service, OpenAir’s PSA is part of Salesforce.com’s AppExchange. Since OpenAir is open-source software, customers are free to tailor it to their own in-house or legacy solutions, but OpenAir is most effective when working in concert with Salesforce.com’s SFA and CRM solutions. When a lead is close to being converted to a client, the SFA application seamlessly hands that information off to OpenAir, which then automates the process of devoting the resources required to close the deal, service the project and fulfill the contract.

The software creates revenue and cost estimates for engagements and uses what-if planning scenarios to optimize price, margin, billing rates, and staffing. Access to real-time information and a more granular estimate of each project’s expected profitability help the sales team focus on the highest-probability, highest-margin deals.

The software also includes collaboration, document control, project accounting, and reporting and tracking tools.

What’s their track record? Customers include Adbeam, Stellent, Collaborative Consulting, Opsware, Witness Systems, and Akibia. The company reported 45% year over year revenue growth for the third quarter of 2006. OpenAir’s subscriber base also expanded to more than 26,000 users, and the company says that it has been profitable for twelve consecutive quarters. The company estimates that revenues for 2006 fell in the $6-8 million range.

Funding: OpenAir has raised over $16 million in venture funding from Fidelity Capital, 3i, i-Hatch Ventures, Rex Capital, and angel investors.

What are the major obstacles to overcome? There are a number of PSA vendors out there. Microsoft Project and Primavera qualify as incumbents, while a number of smaller vendors deliver PSA as a service, including Autotask, Intacct, and QuickArrow.

Illuminata’s Haff notes that software as a service is taking off in the open-source sector. Since open source often aims for the mid-market customer overlooked by larger shrink-wrap software providers, delivering the solutions in a way that minimizes in-house IT burdens is both a necessity and a competitive advantage.

Flexibility is another advantage. “Most of these products can be run as in-house applications, but they’re designed so they can be delivered on-demand as services, depending on customer needs,” Haff said.

The features offered by OpenAir are much like traditional PSA offerings from Microsoft Project or Primavera. The difference is that OpenAir is delivered on-demand. Against other PSA vendors employing the SaaS model, such as Autotask and QuickArrow, OpenAir’s main advantage is that it can be closely coupled with Salesforce.com applications. The two companies even partner beyond the software itself, collaborating on lead generation and marketing.

Management Team: Morris Panner, CEO, previously held a number of operational and managerial positions in the U.S. Department of Justice, most recently serving as deputy chief of the narcotics section. Geoff Crawshaw, CTO, previously founded a software development company in Boston.

Tom Brennan, CFO and VP of strategic alliances, was formerly VP of strategic alliances at Prodigy Communications. Ed Marshall, VP of sales and marketing, was previously a management consultant at Bain & Company and at Liberty Mutual.

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