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| Home - CEO Spotlight - May 05 Issue |
CEO Spotlight: Marc Fleury, JBoss, Inc.
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Angel Mehta: Has open-source evolved, at least within JBoss’ category, to the point where the senior business managers are as comfortable with it as the technical people?
Marc Fleury: Yes, I firmly believe it has. I was recently at a Gartner Web services conference in L.A with Yefim Natis, a leading analyst in middleware, moderating the panel. With 500-600 IT managers (selected by Yefim himself) in the audience, he asked how many used open-source and 80% raised their hand. Today, it’s a foregone conclusion that open-source is the way to go. What you’re witnessing now, with companies like ours and others exploring the next maturity level of the business models, is the delivery of the support past the big bang of 1999 with the Red Hats, etc., and the excitement around free developers, free software. You’re seeing a maturity stamp of an industry that’s more than just a cottage industry, again, where small companies are playing with the big boys, proving the power of the model. It still puzzles me that much of the attention out there is about “is open-source for real”? We’re three steps ahead of that. It’s about support and what are the right strategies to introduce open-source as a standard in the corporate environment. That’s the kind of advanced questions we help customers solve. Again, we’re past the question, ‘is open-source just a fad?’ The answer is absolutely NOT. Open-source is a FACT.
Angel Mehta: Let’s look at your sales strategy for JBoss. Do you attempt to market your products and services to companies that are not already in the open-source game or are you essentially just sailing into those companies who already adopted the application.
Marc Fleury: Angel, that’s a great question and it goes to the heart of the business model. We brought on Rob Bearden, who you know, and he hired his ex-boss, Tom Cooper, who heads our channel strategy so I have the bad boys of Oracle running sales here. Both Rob and Tom used to lead the East and West Coast operations for Oracle respectively so we’re taking this very seriously from a sales standpoint. The little insight is that we flipped the traditional sales game on its head. Let me explain.
When Rob was at i2, after Oracle, he realized that they were spending $2.00-$2.50 in customer acquisition for every dollar in maintenance. We only spend $0.20 on customer acquisition to acquire $1.00 of maintenance. Why? Because we sell to people who have already tried the application server. Again, at the Gartner conference, that was 80% of the audience. We’re talking about large corporations such as Telco’s, banks, travel, manufacturing consortiums, and government agencies that have tried the software and are coming to us to buy the support. That is why we have lower sale costs; because we’re not funding an expensive sales force to knock on doors and convince people, they need to pay us a large chunk of money in order to use and test our products. They’ve already done their homework; they’ve tried it and now they’re looking to roll it out and standardize on it. These companies want a relationship with the software vendor that’s producing the software and that is JBoss.
The fact that we removed the license as a pre-requisite for our customers is at the heart of the distribution game. We’re in the game of controlling mass distributions and monetizing 1% or 2%- of that user-base into a paying customer.
Angel Mehta: What about competitors? Does JBoss have open-source competition?
Marc Fleury: Yes, we have. There are many open-source projects out there and the most famous is probably the French consortium that produces JonAS, which Red Hat bundles, but that really hasn’t gotten any market traction, not even in Europe, and it’s still at 0% market share. There’s always competition from the proprietary and open-source space. Unlike the proprietary vendors where you usually have six or seven competing vendors that all survive in their respective niches, markets and maintenance space, open-source is really a magnified ‘winner takes all’ dynamic. In open-source you don’t have that much money so there’s an aggregation around very few brands. Luckily, JBoss IS one of those leading brands in open-source so that in and of itself results in a very big positive feedback loop.
Angel Mehta: What is the single most critical challenge that JBoss is facing right now?
Marc Fleury: Very frankly, what keeps me up at night right now are sales and operations. Nobody has done this before but we’re pioneering with a few companies who are visionaries of open-source and professional open-source. We know we’re running towards the goal line and it’s not that somebody is going to catch us and tag us; it’s that we’re running and have to make sure we don’t fumble the ball. We have this big opportunity, we’re inventing a new model and it’s not something you learn in an MBA class, it’s not a formula that’s known and we’re just replicating it. We’re staffed with industry veterans; guys like Rob Bearden; David Skok on the board, and Bob Bickel as VP of Strategy. There’s great deal of execution when you’re in hyper-growth. We went from 25 to 100 people in a year and that has its own set of challenges and associated risks. We’ve seen other companies in our space disintegrate overnight because of various things: sales don’t scale or the company implodes under the tension between the open source communist fringe and then the right-wing fringe of the company. We have a lot on our plate trying to execute with excellence and grow it at the same time. So right now, we’re focused on growing up and doing it the right way and that’s very inward-focused.
Angel Mehta: What about yourself? How do you spend your time as CEO?
Marc Fleury: Well, I’m enjoying PlayStation Portable very much (Laughing). Truthfully, I don’t do anything. I talk to you, for example, and I do a lot of press. It’s very low stress. The job is becoming fun again in the sense that I went from being an engineer and a scientist to, almost out of necessity, having to build a business without any experience. The best thing I’ve done was bring onboard Bob Bickel. Bob, an industry veteran, was one of the founders of Bluestone, and general manager of middleware at HP, has deep corporate experience. Having that depth of talent and industry veterans onboard, running the day-to-day business is a great thing because it enables me to transition to a more hands-off role. I’m still very involved in every aspect of the business but I don’t sweat it as much. I have total trust in my executive team and that’s a luxury position to be in. It frees me up to go back to development. At heart, I’m a product manager and that’s how JBoss became successful. So now I’m going back to development and helping my developers think about ease of use, packaging, etc. I’m still the CEO; I’m free to keep my technical edge, to go out and evangelize our model at conferences and to work on new things. We’re thinking about a mezzanine round right now so I’m working on that and not sweating about building the business day-to-day. Personally, I’m in a much better place today than I was a year ago when we were trying to build the business as fast as we could.
Angel Mehta: I understand that your wife also works at JBoss. How does it impact your relationship with her?
Marc Fleury: As you know, Nathalie and I started the business with a third partner, Scott Stark. It started as a family business and today it’s much bigger than us; there are investors, employees and a lot of people I feel responsibility for all these constituencies. In the early days, Nathalie was doing sales, PR and marketing. Now, she is Director of PR and manages our relationship with Schwartz Communications, who take care of the heavy lifting. We speak every night about the business; it’s something we take home and it’s part of every conversation because it’s just who we are. The communication of the company is successful in part because I’m so involved with Nathalie and she’s so in sync with what’s going on that we’re capable of doing a lot of good work there.
The negative is just that it’s very hard to separate what’s home from business. There is no separation still but we’re trying to do a little bit better because bringing the stress of business back home is not necessarily healthy. So we’re trying to self-regulate and not talk about it on Sundays when we’re with the kids. I know of other couples that ended up in divorce but I think we’re handling this pretty well so far.
Born in Paris in 1968, Marc started in Sales at Sun Microsystems France and then transitioned to engineering and moved to Silicon Valley where he worked on early Java enablement of SAP at SAPLabs. An ex-Lieutenant in the paratroopers, Marc holds a degree in Mathematics from the Ecole Polytechnique, a master in Theoretical Physics from the Ecole Normale ULM and a Ph.D in Physics from Ecole Polytechnique for work he did as a visiting scientist at MIT's Research Lab of Electronics. Marc publishes research papers on middleware and aspect oriented programming. Marc can be reached for feedback at: marc.fleury@jboss.com
Angel Mehta is Managing Director at Sterling-Hoffman, a retained executive search firm focused on VP Sales, VP Marketing, and CEO searches for enterprise software companies. He can be reached for feedback at: amehta@sterlinghoffman.net
 
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