Three years ago, it sounded as though William Coleman was planning on kicking back and enjoying his retirement. The co-founder of Internet software maker BEA Systems (BEAS) had plans to spend time with his wife, do some skiing near his second home in Aspen, Colo., and work on fund-raising for the Coleman Center, a research organization at the University of Colorado specializing in applying computers to help people with cognitive disabilities. The center was named after the 57-year-old Coleman, who promised to donate $200 million to get the program off the ground.
But 18 months later, the entrepreneurial bug hit Coleman once again, and he started work on a new software company called Cassatt Corp. Coleman sees Cassatt sitting squarely at the intersection of two big info-tech software trends -- so-called Web services and utility computing. With more than $50 million in venture funding and 115 employees, he's aiming to recreate the magic of his early days at BEA.
Coleman recently talked with BusinessWeek Online Technology Editor Jim Kerstetter about Cassatt, his old company, and whether an entrepreneur can have two big successes in one lifetime. Following are edited excerpts of their interview:
Q: So what are you doing at Cassatt?
A: We're focusing on automating IT operations. I think this is the long-missing piece in this industry. We're at the state-of-the-art of the telephone system in 1925, and there aren't going to be enough IT people in the world to operate this stuff if it keeps on going the way its going.
Q: What do you mean by automating it?
A: Let's start with the two aspects of the problem. In 1990, according to IDC, about 20% of IT costs were in [operations management]. Now, it's over 60%, approaching 70%. Second is the issue of scale. We're managing a lot more things. All we have to do conceptually is what the telephone system did -- automate the management of it.
What we're talking about is a new software platform, not system management, not an operating system. Our product, called Collage, [looks] at the physical world as a set of resources that, based on business priorities, we can dynamically change to [improve] performance.
Q: Is this the next generation of grid computing?
A: I think we are so stuck in our technology buzzwords that we're lost in the trees. Yes, it is the next generation of grid computing. But that's just a part of it. Grid computing is enabling us to get you a lot better capital expenditure for what you're doing. That's part of it. And autonomic computing is part of it.
But we're...looking at this as a holistic problem, because if we think about how the IT industry evolved -- when it started, everything was on one machine, and when something didn't work you just started it again. Technology was expensive, and people were cheap. Then things turned upside down.
Q: Is this going to be incredibly complex software?
A: We have specifically designed it to be implementable by system administrators with two years' experience. There's another aspect of what we're doing that's really unique. As long as your applications run on either Windows or Linux, we don't require any changes to the hardware, the operating system, or the applications themselves or to the system management.
Q: I thought you were retired. What happened?
A: In 1993, I thought I had retired from Sun [Microsystems] (SUNW). After a few months of skiing in Aspen, I was walking home and said to myself, "Boy, is that all there is?" Then we went and founded BEA.
I stepped out of the CEO job at BEA in October, 2001, and about a year and a half later, I was spending a few weeks skiing up in Aspen and had another one of those "Is that all there is?" moments.
Q: You must find skiing exhausting.
A: Well, it's [a case of] be careful what you ask for. I thought I would retire before I was 55. And I did that the month I was 54. But in the meantime, I saw this opportunity, this problem coming. We're talking about orders of magnitude, things to manage.
Compounding that on the personal side, my wife and I have personal ambitions in our work with the University of Colorado, so I have personal reasons to make another company successful.
Q: Who were the first people you wanted to bring in with you?
A: It was like starting BEA. I have a philosophy that if you want to build mission-critical software, if you don't bring in a team that has been together for at least five years, you're not going to get it right.
At BEA, we bought the Tuxedo product line and WebLogic. You're buying a team, buying a competence. When we started this, [we looked at] this company called Unlimited Scale.... These guys had been with Cray [Computers] (CRAY) for at least 20 years and started a stand-alone company in 2000. Basically, they broke the scale problem. So I bought that company.
And the people I really wanted to bring in to do the other side were the people...that had done the systems-management work at Sun and had been disbanded. I had worked with them at Sun since 1989. We just hired the whole core of them, all 19. I hired Rich Green, who I had worked with at Sun since '89, and my coup was Rob Gingell. He was the chief architect of [Sun's Solaris operating system]. I tried to hire him twice at BEA and couldn't. He is amazing. The fun part of this is I get to work with really great people again.
Q: How many people are working for you?
A: We have about 115 people in the company. About 75% are in R&D, of course. But we're starting to build our sales and services organization. The early focus is on early adopters. We've chosen three markets, one is about 50 square miles in lower Manhattan, one is about 50 square miles around the Capitol in D.C., and the other is [the independent software] market.
Q: I have to ask, are you worried about BEA's direction? It appears stalled.
A: I still think BEA is a technology leader. From an economic point of view, [CEO Alfred Chuang] has done a good job of holding the economic line. In any other industry, a company that's growing 10% top line, with a 21% pretax operating profit and generating a quarter-billion free cash flow on $1.1 billion in revenue would sound pretty good.
But the problem is we're in the part of the technology cycle in which what was invented in the last decade is being commoditized. And that market is being commoditized both by the big players and by open-source.
The market needs a BEA, but I think BEA is challenged. I would like to see BEA be more aggressive in how they can dramatically break out of just the niche they're in. I can say that because I've been off the board for more than six months, and I wish [them] all the luck in the world. Obviously, I'm disappointed they haven't been more aggressive in the last couple of years.
Q: So BEA was out of ahead of Internet software in the 1990s. It sounds like you're trying to get out ahead of what's being invented in this decade.
A: I think that's exactly right. Every 10 years in technology have been an exact repeat of itself.