For the first time in twelve years: WSO2 records a profit

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eBay uses its software to process 1 billion transactions every day. The city of London uses its software to manage its transportation system. Among the many titans in the IT industry, WSO2 is one that needs almost no introduction. The company builds open source software that powers the operations of giants around the world.

Last year the company appointed a new CEO. With the dawn of the new year, the company made a grand announcement. WSO2 is now the 8th largest open source software company in the world. With this announcement, Tyler Jewell – WSO2’s CEO shared the financial results of the company.

Dr. Sanjiva Weerawarana on the news WSO2 is profitable
Dr. Sanjiva Weerawarana on the news WSO2 is profitable

Explaining this decision, he said, “We align WSO2’s interests with customers by IP transparency through open source and the Apache-way. To further the alignment, we have with customers, WSO2 will now annually report key business and financial results.”

Along with this data, there was another exciting announcement. “Finally profitable and cash flow positive after 12 years,” said Dr. Sanjiva Weerawarana – Cofounder and Chairman of WSO2.

Where WSO2 stands today: with a profit

Looking at these financial results we get a slight understanding as to where WSO2 stands today. In 2017, WSO2 made $25.5 million from subscriptions. This is a growth of 52%, which is higher than the 46% growth rate the previous year.

WSO2's key metrics (Image credits: WSO2)
WSO2’s key metrics (Image credits: WSO2)

In terms of customers, the company acquired 150 new customers in 2017 and more than 80 new subscription customers. To support this growth, the company began significantly hiring in support, sales, and marketing roles. Thus, the company exited 2017 with close to 500 employees.

But the most important fact in the data was that WSO2 made a profit. Tyler explained this saying, “In 2017, we will turn our first profit with $603K EBITDA and generate $2.7M cash from operations.” So how did it achieve this success? Tyler attributes it to four reasons:

  • The passion and commitment of employees and partners
  • Product and intellectual property expansion to service cloud-native architectures
  • The continued rotation from proprietary to open source software
  • The maturity of WSO2’s employees and continuity of operations

WSO2’s game plan for 2018

As it enters 2018, WSO2 is the 8th largest Open Source Software company. Its rivals are now RedHat, Pivotal, Mozilla, Canonical, Hortonworks, Suse, and MongoDB. But these are only the ones that offer open source software. There are still other rivals for WSO2 such as IBM and Oracle that offer similar products.

To measure WSO2’s performance to its rivals is challenging. Despite releasing its financials, the company was selective with the limited data it chose to reveal. As such, it only gives us a slight understanding as to where the company stands today. And this makes it difficult to get a full picture and see how the company would fare against its rivals.

For the first time in twelve years: WSO2 records a profit 15
Tyler Jewell reflecting on a successful year for WSO2

So what’s WSO2’s game plan for 2018? Tyler explained, “We expect the coming year to continue playing to our strengths. Trends tied to growth in programmable endpoints across devices, identities, apps, APIs, and data will increase.” With that being said, WSO2’s operating plans are:

  • Invest in Ballerina
  • Expand its sales and marketing efforts
  • Continue its investment in cloud-native architectures
  • Invest into broadening the value of its subscriptions
  • Launch research initiatives into upcoming open source technologies
  • Formalize its CTO office
  • Doubling its investments into marketing, enablement, and market education programs
  • Renewed focus on open source governance
  • Expanding its sales territories from 4 to 9 and separating its OEM ISV business

Moving forward, WSO2 expects to increases its profits. Furthermore, the company is still hiring and as such expects to end 2018 with approximately 560 employees.

“All this means we can – and will – create a lot more open source that helps IT digitize assets. We will be working to turn WSO2 into an IT-household brand, bringing our form of integration into every application and service you are building,” said Tyler reflecting on a successful year and looking to the future.

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