Profile: The solution provider enjoys healthy growth after switching its focus to open-source products and services.Linux revenue is small change for most channel companies, but for some, it fills the bank account. Case in point: Initsoft, a Cupertino, Calif., company that specializes in designing and hosting Linux-based Web sites and creating custom Web applications for companies of all sizes.
"All our revenue is generated by Linux solutions, and it is growing 30 to 40 percent a year," said Salim Lakhani, the company's CEO. While he wouldn't cite revenue figures, Lakhani said that Initsoft added 18 employees since it started to focus on open-source application development in 2001. The company, which began in 1995 as a Web developer, now has a total of 20 employees.
"The Linux market has changed a lot in five years," he said. "Just a few years ago, I used to avoid even mentioning open source to customers for fear of the negative responses I would inevitably get. Mentioning Linux was like opening a can of worms."
But today, Lakhani is anything but afraid of mentioning Linux because his customers are much more aware of the platform's strengths, he said.
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"They know Linux means more than just low cost. Sure, they are interested in avoiding licensing fees, but they know Linux can give them reliable, scalable solutions,"
Lakhani said. Lakhani said many of his customers are aware that successful open-source projects are much less vulnerable to security intrusions than projects based on proprietary software. His customers range from RAE Systems, a public company in San Jose, Calif., that manufactures chemical and radiation detection products, to small startups such as AmeriFlood, an insurance agency in Trinity, Fla.
Linux's biggest advantage for customers is it gives them an affordable customized application, Lakhani said. "Doing open-source coding costs less because it needs less work," Lakhani said. "In the long run, customers get an app that fits them like a glove."
The open-source approach appealed to AmeriFlood, which sells flood insurance backed by the Federal Emergency Management Agency with a unique twist: It offers a 12 percent rebate that can be applied year after year. The company has built its business model around rebating.
When AmeriFlood decided this summer to move from telephone and face-to-face selling into the online space, it turned to Initsoft for assistance. Initsoft quickly developed a "brochure" version of www.ameriflood.com and is on track to deliver the live, final version later this year.
"We chose Initsoft because it has a track record of working on large, complex Web and integration projects," said Timothy Wahl, AmeriFlood's president. "Advanced Linux technology will allow customers to buy their flood insurance direct from the underwriter, making us one of the first companies to provide this service online."
AmeriFlood specifically wanted a Linux/open-source Web site for several reasons, Wahl said. "We had a tight budget and deadlines; we didn't want to be locked into a long-term contract and annual renewal fees. And we didn't want to build applications from scratch."
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Wahl said people are familiar with buying other insurance policies online, but flood insurance stands apart because of the complicated process of calculating the premium.
Initsoft is finalizing an application that will enable AmeriFlood to determine a property's risk using a third-party flood risk calculator. The risk assessment will be based on a property's particular flood zone and elevation.
"The AmeriFlood Web site is a good example of a complex application that can be developed quickly and cost-effectively using Linux and other open-source applications," Lakhani said.
"When building Web applications, we generally start with Drupal or Alfresco as the content management system and add Centric CRM if a customer relationship management app is needed," Lakhani said.
Down the road, Initsoft plans to work more with SpikeSource, a Redwood, Calif., software company that distributes, integrates, manages and supports open-source applications, Lakhani said. The solution provider also will stay on the lookout for other application packages to add to its roster, but whatever vendors it picks, they most likely will have one fundamental thing in common: an open-source strategy.
Herman Mehling is a freelance writer in San Anselmo, Calif. He can be reached at herman-mehling@sbcglobal.net.
Solution Provider Quick Facts
Company: Initsoft
Location: Cupertino, Calif.
Focus: Linux, Web applications
Years in business: 11
Number of employees: 20
Web site: www.initsoft.com
