Sramana: How were you able to leverage the first sale to get Liferay established?

Bryan Cheung: In 2001, Brian had put the first version out as an open source project under the MIT license, which is one of the most liberal ones out there. Under that agreement, you can do whatever you want with the software, including sell it. We allowed the company to use the open source software, so any funding we received had to be achieved from the services.

Sramana: What types of professional services were needed to make the installation live?

Bryan Cheung: In the early days, we basically wanted to improve the portal product itself. We essentially asked for sponsor development, so we were able to improve the open source product. Any areas of customization such as visualization were be provided just for that implementation.

I can’t say how much each customer was spending. In our first year of business, we were doing mid six figures in services revenues. By the second year, we had doubled our first years’ revenues. We bootstrapped the company using professional services and were able to double the company every year for the first several years. By 2007, we were doing millions in revenue and had over 50 employees. Our client portfolio was very diversified, and we began to notice a lot of other commercial open source companies.

JBoss and MySQL were growing quickly as well. SpringSource got their Series A in 2007. We realized that professional services was fine for bootstrapping but that if we wanted to scale then we needed to get into the subscription business that allowed us to sell upgrades and updates to the open source project. In 2009, we made the difficult but wise decision to create an enterprise edition of the software. That essentially allowed us to scale back on the services and focus on developing the product itself.

Sramana: What kind of customers did you work with? Who was interested in portals in the early days, and what types of customers do you have now?

Bryan Cheung: In the early days we had customers in entertainment, financial services, higher education, and other industries. There is a certain profile, which is a customer who had a senior technical person who was a visionary. They really saw the value of Liferay as a technology and were able to see what the platform could do for them and their business.

The open source model meant they could download and evaluate the software. They could evaluate how the code was written. One of our advocates, who spearheaded the adoption of Liferay, was a mid-level technical manager. He bubbled his support of Liferay up the management chain.

Sramana: So customers were able to find you in the open source community, tinkering with the software, and then they approached you?

Bryan Cheung: Exactly. The overwhelming majority of our current sales are inbound. These are people who have already stood up the software, and they now need the enterprise edition. Their business partners want a responsible party because they will not run a business critical system without proper support. They are already 80% confident that they want to buy; we just have to help them through the process.