PLM vendor says SAAS and OSS are a natural together

Arena Solutions produces and sells a hosted, subscription-based product lifecycle management (PLM) tool for manufacturing companies. Arena founder and CTO Eric Larkin uses open source tools to develop, secure, and maintain the software-as-a-service product. He believes that open source is the path to success for subscription software. “It’s a more cost-effective way to build and scale a SAAS business,” he says.

PLM systems track all of the documentation relevant to a product’s manufacturing process. Each part of the process, from design to prototype to final production, requires input from many different sources both within and from outside the company. PLM ties the informational process together and gives everyone who needs it access to the latest changes and specifications.

Traditionally, PLM has used large, self-hosted networks and applications, but Arena’s PLM is Web-based, remotely hosted, and maintained on Arena’s servers for a monthly subscription fee. “Because we sell the software as a subscription, we have the opportunity to use open source in the creation of the product,” Larkin says. “We also use open source tools for a lot of our system administration.” The production network runs on Red Hat servers, and Larkin takes advantage of tools like WebSphere CE application server, Nagios for system monitoring, and Snort for intrusion detection.

Larkin first became acquainted with open source when he launched Arena in 2000. “I really started looking closely at open source then. We decided to build Arena PLM on AOL’s NaviServer, and it became very clear to me that the open source solutions for Web applications were substantially ahead of commercial products in scalability and usability.”

One of the reasons Larkin likes open source is because it is much easier for him to pinpoint the exact location of problems in an application. In closed applications, all he could do was report the symptoms to the vendor and hope they cared enough to fix the problems. But through his experience with the community surrounding WebSphere CE, Larkin discovered the true benefits of a transparent development process. “From my perspective, the nice thing about open source is that it aligns the developer’s interest with the consumer’s interest more closely, because you’re really working with the code and able to provide feedback at the appropriate level for the stack. You’re able to make that incremental progress in the product much more effectively through open development.”

Larkin says IT managers should look for a supportive community when selecting open source platforms. “That’s why we are in the process of migrating away from NaviServer onto WebSphere. The state of the art has moved forward, and NaviServer is not very well supported. We’re looking to leverage the efforts of a much larger community, because we originally chose an open source platform that didn’t become the preferred platform. The effort of migrating to a new platform is justified by the gains we’re getting in efficiency and a large community. You want to be careful about the selection of your open source platforms. The simple fact that it is open source doesn’t mean as much as the community behind it. Now, we very much look for tools and packages which have a good community behind them — those are the packages we know will find their way to success in the marketplace.”

Larkin sees parallels with the SAAS model and the open source model. “They are both sort of second-generation software business models that do a much better job of serving the customer’s interests. When we sell a subscription to a customer for a year, a year later we have to sell that again. If we have not been successful in making it useful, we’ve lost the revenue from that customer. So we are highly motivated to make our customers happy so they will renew each year. In a similar way, open source forces a model that is tied to customer satisfaction. With traditional licensing models, the vendor collects a whole bunch of money up front, delivers the CDs, and tells the customer, ‘I hope you’re able to make use of this,’ and there are these horror stories of spending five million on an implementation and nothing works. But open source companies are motivated by customer happiness, and that will end up being a very good thing.”