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Bill Coleman's $1bn gamble

Checking in with Cassatt

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The one customer Coleman points to most often is drug giant Pfizer, which has apparently seen major improvements in server utilization and lower application server costs as a result of using Collage.

All told, however, Cassatt only claims about a dozen paying customers at this time despite selling Collage in earnest for about a year.

"You have to go through multiple versions of your product, get it in customers' hands and figure out what works," Coleman said. "You have to get to the point where a customer is willing to write you a seven figure check. That's enterprise software, and we got there last July.

"Then, you have to through a period of figuring out how to make this repeatable and calibrating the sales model and gaining references. That's what we are doing now, and that will probably continue through the rest of this year."

The virtualization pitch has long looked iffy to us not only because of the vague promises but also because of the basic premise. You have to buy more software.

Customers struggle today to keep up with all their different applications. Then, a company such as Cassatt comes along and adds not only the main Cassatt package but then has separate packages for managing Java application servers and virtual servers. By mid-year, Cassatt plans to add another package for managing multiple data centers as a single system. On top of all this, third parties will be able to plug in their own takes on management for specific areas.

Coleman insists that all of this software actually saves money in the long run. Customers can use fewer servers and software packages by making Collage their central console. In addition, Cassatt can provide returns in less obvious areas by shipping customers detailed reports on how often software packages are used by various departments and simply by powering down servers that are not in use to save on energy.

All told, this leads Coleman to believe that customers will find this new type of virtualization platform inescapable in the coming years.

"There is no doubt that, by the end of the decade, us or something like us will energize the whole market," he said. "The big guys - it could be IBM, it could be Cisco, it could be EMC, it could be Symantec - have to move into adjacent spaces.

"I think there is a clear path, if I can calibrate this model, to a billion dollar revenue company in the next five years. Now, it may not be this company, but I believe it has to be something close to this model."

Unlike most of the people hawking virtualization wares, Coleman has a handle on the fluff surrounding the market thanks to past experience.

"I remember back at BEA when our tagline was that we were the enterprise middleware solution," he said. "Within a year, Gartner had a middleware magic quadrant, and we were in the upper right-hand corner. Within two years, everyone had defined every piece of software as middleware, and it had no meaning whatsoever.

"Unfortunately, that's what is happening with grid, virtualization, utility computing and on demand. That only way you can imbue meaning into what you do is by having successful customers that validate your proposition."

Cassatt has some tremendous challenges ahead of it. As with any start-up, it needs to expand well beyond a couple handfuls of customers to claim something meaningful. Countless virtualization players have already tried and failed at that task.

In addition, the big boys continue to lumber along with their own products, and they'll always enjoy a more direct line to the large accounts.

Thankfully, the company doesn't claim that it will defeat all of these obstacles in the next couple of months. Coleman's experience turning a start-up into a large, successful company has put the virtualization march into perspective. This is a multi-year kind of thing.

If you don't have thousands of servers, a serious problem and some cash to burn, then it's probably best to ignore the flood of virtualization press releases for quite awhile longer. But the big boys out there might want to go ahead and give Cassatt a try. ®

Bootnotes

You can hear some audio clips of Coleman’s take on past employer Sun here and past employer BEA here.

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