Startup man an open source champion

As Lineo was winding down, Waldie set about forming his next open source company, SnapGear. “We exited with a group of great technologists, some good open source IP, a small pool of funding and negligible revenue.”

The difference was that while the earlier company was about developing tools, SnapGear would focus on developing products for secure distributed network access, a market that Waldie expects will be one of the most significant segments of the IT management space over the next few years.

“With Lineo we did work for very large companies and we got a sense of what big companies wanted. You could say we got an inside track on the VPN market. That was another fortuitous thing.”

Still, serving as CEO and chairman, Waldie saw revenues grow to US$15 million by 2003 when the company was acquired by another Nasdaq company, CyberGuard.

By now, Waldie says it was time for his self-described mid-life crisis. He took a year off and went travelling and fishing for barramundi in northern Queensland. The scent of fresh air also led him to buying a 200-hectare farm where he still runs cattle. He is also looking into making wine.

“However, by mid 2004, I realised again that I had headed off down the wrong track. What really excites me is building IT businesses.”

Waldie’s current vision is that open source models of development and business will spread beyond software and into the hardware markets, spawning myriad new devices and solutions generally based on the sharing of core design smarts.

Coinciding with this trend, he predicts that notions of intellectual property will be outmoded within several years, and that companies will have to do a lot more than simply “protect” their ideas to succeed in the future.

“The notion we have today of the value of IP will start to erode within a decade,” Waldie says. “People need to think of more tangible things.”

Generally speaking the technology companies that truly succeed are those that are able to bring about genuine change, not only in processes but also in perception. “One thing I’ve learned is that it’s fine being a good company doing better, faster products but that doesn’t make a good international company. To be successful you need to be disruptive.”

Waldie cites the example of MP3 music files as the sort of effect that all, but especially Australian technology companies should strive for, otherwise don’t bother leaving home.

“When you do management school they don’t tell you how to create disruptive technologies. Unless you are disruptive you should not go overseas with your business”.

This is the key challenge for Australian companies, Waldie believes, especially for those that have aspirations of making it in the US.

Having successfully managed several Australian technology companies and sold them in the US, Waldie has discovered that the best strategy for budding startups today is for them to set themselves up as though they are already there.

One of his current ventures, PORTtel, is to help guide Australian and New Zealand companies through setting up in the US, covering everything from regulatory advice to gaining the necessary visas.

Waldie is also very active with the recently formed Anzatechnet, which is a support group for Australian and New Zealand companies looking to set up in the US. “In business it’s so important to find faces and make contacts -- it’s invaluable in making it in a big market like the US.”

However, the downside of styling companies as foreign concerns is that it can preclude them from government assistance programs, although Waldie thinks that it may be some time before local entrepreneurs view this as a major disadvantage. “Often the cost of participating in local schemes is greater than the benefits.”

Waldie’s latest company, Opengear, is essentially a US company, although almost all the executives, staff and investors are Australian, except for a 15 percent stake held by US-based investors.

In a way the company is a culmination of 25 years’ work for Waldie, both as an IT entrepreneur and a champion of the open source model.

It also brings back together former staff and investors. Tony Merenda, Opengear’s president, was a co-founder of Stallion in 1985. Further, the Waldie family has always been involved with Bob’s businesses, with two of his sons having worked for various ventures while his wife Mary has been financial controller at most of them.

Waldie estimates that the global market for so-called open source hardware is currently approaching US$1 billion with only a handful of players currently jostling for position. “Once it’s [open source] in hardware I think that it will move into a whole new design area.”

Opengear sells a range of open source console server and KVM solutions it hopes will gain it an early foothold in the booming market for remote systems administration solutions.

Operating like a “black box”, the device basically sits on top of computer servers in the data centre allowing for fast remote monitoring and management of issues.

Called out-of-band management, the concept is that companies can do remotely exactly what a system administrator would do on site. The company expects $2 million to $3 million in sales next year and currently has four staff in Australia and five in the US. Recently it announced new distribution partners in Australia and in China.

“We are making a very disruptive entry into the market,” Waldie says.