Deal Radar 2009: MuleSource

We continue our focus on enterprise open source in the context of service-oriented architecture (SOA) with San Francisco-based MuleSource. Founded in 2006 by Ross Mason, MuleSource is the leading open source SOA vendor. The company’s roots are in the Mule project, which Mason started in 2003 in response to his frustration with integration “donkey work” as an IT architect/practitioner at major financial institutions. He decided to create a platform that emphasized ease of development and re-use of components. MuleSource Inc. was created to support and enable the rapidly growing community using the project’s enterprise applications.

With MuleSource, Mason wanted to challenge a market that had been traditionally dominated by proprietary software companies offering heavyweight vendor-oriented software. Developed as an open source project by the community, Mule was designed to be lightweight and developer-friendly. Further, it aimed to allow seamless integration with existing applications and infrastructure that ruled out the vendor-driven “rip and replace” scenario or lock-in. In October 2008, MuleSource announced the general availability of Mule 2.1 Enterprise, an enterprise-class edition its open source enterprise service bus (ESB) with capabilities and features including premium connectors, support for the Mule RESTpack, and retry policies designed for enterprise deployments.

The company follows a “hybrid open source” approach wherein community editions of the software are free for developers to download and use it under standard open source licenses. However, for enterprise-level deployments, MuleSource offers software subscriptions with exclusive Enterprise Edition features, along with tools for monitoring and management, technical support, indemnity, and freedom from the requirements of the open source license. Subscriptions are priced on an annual per-CPU basis, with varying levels of support based on response times, number of support incidents, etc.

Though the standalone SOA/ESB market is estimated to be around $2 billion, growing at 40% a year, Mule touches, enables and disrupts several adjacent markets, including enterprise application integration (EAI), message-oriented middleware (MOM), and cloud computing, expanding its addressable market to approximately $7-10 billion.

Mule quickly gained a reputation as it solved some of developers’ most pressing integration problems. Today it boasts of over 1.5 million downloads of the software and over 2,000 production deployments. Since the software can be deployed easily and is low-cost to use, it addresses small/medium business and Global 2000 enterprises alike. The company has over 100 customers that include Nestlé, H&R Block, Walmart.com, Scripps Networks, and the Leukemia & Lymphoma Society.

MuleSource has raised $16.5 million in venture capital so far: a $4 million Series A from Hummer Winblad Venture Partners and Morgenthaler Ventures in October 2006; and a $12.5 million Series B from Lightspeed Venture Partners, Hummer Winblad Venture Partners and Morgenthaler Ventures in May 2007. The company is in revenue stage and has delivered 100% year-over-year revenue growth. Though MuleSource has enough cash to get to profitability on its current plan, it is open to raising additional capital in the future to cash in on new opportunities.

MuleSource, which had been without a CEO since September 2008 when Dave Rosenberg left to work on his stealth startup, appointed a new CEO, Greg Schott, in February 2009. Schott has more than 20 years of technology management experience and had most recently served as senior vice president of marketing of open source Java infrastructure software provider SpringSource. Schott, who has helped grow companies from early stages through IPO and beyond, is expected to guide the company’s long-term business strategy.

Suggested Reading:
Commercial OpenSource: SpringSource CEO Rod Johnson
IBM’s Business Remixing
Deal Radar 2009: MindTouch

This segment is a part in the series : Deal Radar 2009