Enterprising search: Flax's startup story

Open source enterprise search specialist, Flax was born out of the wreckage of another startup story that went wrong. Having experienced first hand some of the excesses of the dotcom bubble, Flax founders Charlie Hull (CEO) and Tom Mortimer (CTO) decided to pursue a more studied and sustainable approach to building a business.

Flax has steadily built a strong customer portfolio over the past decade or so - customers include the Financial Times and Reed Recruitment - but is now experiencing its strongest ever growth. Open source search is, if not booming, then beginning to make a big noise and with wise heads at the helm, Flax is backing itself to be heard above the hubbub.

THE PROBLEM:

Enterprise search is the art of finding different kinds of documents, stored in different ways and in different places across a business’ IT systems. A company needs to harvest all the information it possesses on a particular topic for a sales pitch, for a regulatory filing, for a marketing report - it fires up the enterprise search engine. There are a number of technical differences from web search, but chief among them is this ability to go ‘off-road’ and find not just the most popular result, but the most relevant and useful.

Enterprise search is big business, but has been accused of being more about marketing ingenuity than true innovation. The algorithms that underpin even the most shiny looking search technology have been around for a long time, says Hull.

THE SOLUTION: 

“Our thinking has always been that search should be open source. We know how to write an efficient, scalable search engine, why don’t we concentrate on some of the stuff around the edges which is actually innovative. The actual core is well-known and understood,” says Hull.

License fees for closed-source enterprise search typically increase with the number of documents being searched. With the technology becomes an ever more fundamental part of modern business and as the demand for sophisticated implementations increases, all the pressure on pricing is upwards.

But for open source software to be widely adopted it needs commercial backup: enterprise grade support, training and consultancy. The well known Apache Lucene/Solr stack now has just that, spearheaded by Lucid Imagination, a VC-funded organisation that has backing from the venture arm of the CIA.

“A few years ago the open source enterprise search software wasn’t as capable as the closed source equivalents. Now it is and just importantly it has some serious resources and a global network behind it,” he said.

Whereas search was previously a ‘bolt on’ as far as most businesses were concerned, it has established itself as the foundation of many business processes. And even if the mathematical underpinnings are not, the use cases are evolving at a rapid rate, according to Hull.

The key to answering the new questions that businesses now want to ask, is the ‘search-based application,’ Hull says: “In the old days when you were putting together an application for your business, you’d have a relational database, Oracle, SQL or whatever - and you’d build things on top of that. The trouble is those databases aren’t very good at answering complex questions, such as you might ask in a search engine.

“What you may not be able to do with Oracle because the database just can’t take it, unless you throw more hardware and software at it, you can do with a search application. Instead of thinking about it just as a problem that involves typing stuff in a box and then hitting go, we prefer to think about business problems we can solve with search.”

THE INSPIRATION:

After the dotcom crash, “the writing was pretty much on the wall,” Hull says. Brightstation had run through its funding, without managing to do a huge amount of business.

Having bailed and started up what was then called Lemur Consulting, the pair decided that a search consultancy would allow them to put their expertise to work, but without exposing themselves to the kind of risks that had brought down their previous employers.

About four years ago the firm decided to concentrate exclusively on open source software and rebranded as Flax. Having built up its reputation within the open source community, the company was approached by Lucid Imagination to become one of three UK partners. Flax is now a reseller of Lucid’s support services, as well as the packaged version of the software called LucidWorks Enterprise.

THE TEAM:

Charlie Hull and Tom Mortimer co-founded the business in 2001, having previously worked at Cambridge search company, Muscat. Muscat was acquired by a venture funded group, Brightstation at around the turn of the Millennium and while there, Hull and Mortimer led the team that built a half-billion page web search engine called WebTop - very big numbers for the time.

THE OPPORTUNITY:  

You only have to look at the amount HP was willing to pay for Cambridge’s own enterprise search giant, Autonomy to see that some big names fancy the market. Hull believes that while a relatively mature market, there is an opportunity for open source in enterprise search not just for the obvious financial reasons, but because the huge amount of M&A activity over the past few years has somewhat undermined the stability that customers thought they were getting when they bought from the big players.

He said: “There have been some other major changes in the market. There was a huge player called FAST, based in Norway and they had a great reputation and made very good technology. They were bought by Microsoft about four years ago. FAST ran on Linux but these offerings were discontinued and the main technology was bundled into Sharepoint.”

“A lot of people didn’t want to move over to Windows or Sharepoint and so were looking for alternatives. Open source enterprise search was just coming of age at that time and so managed to make some important gains.”

With players like Google, Autonomy, FAST/Microsoft and IBM, competition could not be stiffer in the enterprise search market, but all of the current dynamics are allowing open source to gain a firm foothold, Hull believes.

THE BUSINESS MODEL:

As a consultancy, Flax is able to support a wide range of open source technologies, selling support services, ‘value-added’ software and training.

“We are a consultancy business so a potential client comes to us with a search problem and we say, look there’s an array of open source software you can use to solve it. We will help you build it or you can do it in-house if you like. If they choose to use us, we will tell them how long it will take to build it and charge on a day-rate basis.

“Some of our clients come to us because they find a technology that they like - we work a lot with an open source search engine called Xapian - an open source version of the Muscat software. That’s another of the strengths of open source - if a company that develops it falls over, the technology doesn’t go with it.”

THE FUNDING:

Flax has never taken on any external financing: “building slowly and sensibly,” through customer wins, according to Hull. Flax is currently busier than it has ever been with some “really significant new contract wins” in the pipeline. Turnover last year was a lot higher than the year before, in the teeth of some of the toughest trading conditions since the dot-com bubble, Hull says.

The firm has expanded its team over the last year and is on the look-out for more talent as we speak: “We’re doing an excellent job for a relatively small number of high profile clients and we trade on our reputation so the people that work for us have to be damn good,” he said.

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