Lucid Imagination is the latest beneficiary of what I like to call the boil-in-a-bag open-source business model.
This is what happens when a few people spot a popular open-source project and decide to give it a corporate wrapper. They corner the market on the expertise behind a given software package by hiring the 10 or so main developers. Then they pick a fancy name, fire up a Web site, buy a few phone lines and stand at the ready, waiting for customers to start calling for support and other help.
This setup has a boil-in-the-bag flavor because the software has already done the hard part: it found a devoted audience. All the entrepreneurs have to do is try to cash in on that proven popularity through support contracts and some marketing polish.
Red Hat (support for Linux) pioneered this business model, and start-ups like Cloudera (support for Hadoop) and Acquia (support for Drupal) are among the latest crop of bag boilers.
In the case of Lucid, the company hopes to profit from an open-source software package called Lucene.
When paired with some other software (another open-source package called Solr), Lucene turns into the basis of a pretty powerful and fast corporate search system – the kind of thing companies use to trawl through and organize their internal data.
Thanks to the work of the open-source coders and its low-low price tag (free), Lucene gives corporate search products from the likes of Microsoft, Google and Autonomy a real run for their money.
Companies like Netflix, FedEx, Verizon and Nike were Lucene users before Lucid even existed.
And, over the last year, since it was introduced, Lucid has managed to sign up a few of these folks as paying customers for its support services, along with some other big-name brands like Zappos.com and AT&T. (The company claims a number of customers in the intelligence community as well, and is financed by the C.I.A.’s venture capital arm, In-Q-Tel.)
“Lucene is 10 years old,” said Eric Gries, the chief executive at Lucid Imagination. “In the last two or three years, it became really good. Now, we’re seeing about 10,000 downloads a day of the software.”
The interest in corporate search systems has increased steadily as businesses deal with ever greater volumes of data, and companies have used Lucene for a variety of tasks.
MySpace, for example, will perform searches on its user database to try to determine someone’s age.
“If there’s a person who says he is 18, but all his friends are in the fifth grade, then MySpace can see that,” Mr. Gries said.
Verizon, meanwhile, uses Lucene to help customers find ringtones on its Web site.
More standard uses of the technology revolve around finding internal e-mail messages, photos and other documents. The diverse nature of such files makes corporate search a particularly tough task. It’s also a very delicate type of technology since companies often rely on corporate search to find documents related to litigation.
There’s big money to be had in this business.
Autonomy, for example, posted a 44 percent rise in revenue, to $517 million, through the first nine months of 2009. In 2008, Microsoft acquired Fast Search and Transfer for $1.2 billion, hoping to add a deep search edge to its business software. And at Google, the company sells a specialized server appliance to businesses.
Lucid thinks it can undercut these big guys in price. It sells annual support contracts that cost $12,000 to up to about $50,000, depending on the level of service.
Since Lucene is open-source, anyone with a pulse and some ambition could set up a rival company to Lucid with similarly priced or cheaper support services. But like other boil-in-a-baggers, Lucid will focus on its deep bench of Lucene experts as its major edge.
Mr. Gries said the company was making “in the millions of dollars in revenue” a year.