By Bruce Rogers

The Web and many software applications as we know them today wouldn’t have existed without the pioneering work done by IBM. Two of the pioneers at IBM who would then go on to found and finance the innovative WSO2 were Sanjiva Weerawarana and James Clark. Weerawarana is the founder and CEO of WSO2 and Clark is the legendary software entrepreneur and investor who helped launch the company with its first funding.

WSO2 is an iPaaS company or Integration Platform as a Service that provides a suite of cloud services enabling development, execution and governance of integration flows connecting any combination of on premises and cloud-based processes, services, applications and data within individual or across multiple organizations. WSO2 was founded in 2005 by Sanjiva Weerawarana, Paul Fremantle and Davanum Srinivas. This founder’s journey is based on my interview with Weerawarana.

In all likelihood, neither Weerawarana nor Clark would have left IBM if the company was more nimble in bringing its ground-breaking research and open-source solutions that the pair worked on to market sooner. Much like Xerox PARC allowed the irrepressible entrepreneurs Steve Jobs and Steve Wozniek to commercialize those inventions into Apple products, IBM was too concerned about cannibalizing its enormously profitable WebSphere software in the ‘90s and early 2000’s. So, both left to forge their own paths. Clark moved to and became a citizen of Thailand to continue his work within the Apache and Open Source community. Weerawarana decided to launch WSO2 from his home and birthplace in Colombo, Sri Lanka.

“I had written a business plan for IBM called IBM Small Business Server to avoid kicking up against WebSphere. Because WebSphere is a very complicated, fantastic, powerful, but very big and heavy program. And IBM said ‘Nothing doing. We are not shipping something else.’ We had to put this stuff into the current products. And that was really boring. And I wanted to continue that technical direction on my own,” says Weerawarana.

He had already moved back to Sri Lanka in 2001. As a longtime open source person, he had been on the board of the OSI Open Source Initiative for a while as an Apache member. “I knew the power of open source as an enabler for a small group of people to impact the world in an unequal way,” says Weerawarana. He not only wanted to provide a powerful middleware solution for small businesses, but also use the opportunity to prove to the world that Sri Lanka could compete with India as a centre for tech innovation.

WSO2 stands for ‘Web Services Oxygenated’ with the number ‘2’ referencing the chemical symbol O2 for Oxygen, which harkens back to Weerawarana’s Web Services days, but a better, lighter, open-source version of it. The company competes in the fast-growing global market for integration platform as a service offerings, which was valued at $3.4 billion in 2021, and is projected to reach $37.9 billion by 2031, according to Allied Market Research.

Today, WSO2 has over 900 employees producing $100 million in annual revenue, according to Weerawarana. Its headquarters are in Santa Clara, California, though Weerawarana remains in Colombo with the product development team. Beyond Sri Lanka and US, the company also has offices in the UK, Brazil, Germany, Australia, UAE, India, and Malaysia serving over 800 direct customers, plus 5,000 or so OEM customers and 25,000 open-source customers. While WSO2 originated for the small business market, it successfully moved into the enterprise arena serving companies like Panasonic, AMP and Qantas. It now offers a SaaS subscription service that has become its primary source of revenue.

Over the past 18 years, the company raised a total of $133.5 million over 6 funding rounds. Their latest Series E round funding raised $3 million in May of 2022 led by Redstart Labs which came on top of its $90 million fund raise, also a Series E, led by Goldman Sachs. Additional investors from previous rounds include Pacific Systems Control Technology, Toba Capital, Quest Software, Intel Capital and others.

Neither raising funds in the beginning or growing and managing WSO2 has been a straight line journey toward success for Weerawarana. He left IBM to create his own company with little to no financing.

“When I quit IBM, we didn’t have any money raised. And we started talking to people and I reconnected with James Clark, who I met in 1998 at IBM. And I also knew he was a very rich guy living in Thailand, brilliant technical guy. And because of the 2004 Tsunami, we built a software system called Sahana, which is now its own foundation called Sahana Software Foundation, which is a disaster management platform. And the Thai government gave me an award for that. And I had to go to Thailand to get it in February of 2005. And as Jim was living in Thailand, I met him there and I said, ‘I’m trying to start this company. And he was like, Okay, sounds good. I can do something,” says Weerawarana.

Clark’s angel investment helped float the company and he set about registering the company with the name ‘Serendipity’, which sounded like Sandeep, an old name for Sri Lanka. “Serendipity was what I wanted to call it. Paul was okay with it. But unfortunately, serendipity.com was not there. So we then we registered in Sri Lanka as ‘Serendip’ systems, And then in August, when we had all agreed what we’re going to do, the weekend before wiring the money, James said, ’I don’t like the name. You gotta change the name or I’m not giving you money.’ And he was right. It is not a very good name for a company. So, we had a weekend to figure out a name,” says Weerawarana.

They brainstormed ideas, but with two conditions: it had to have a semantic meaning and the domain name had to be available. Finally, they came up with WSO2. “The name came from web service oxygen. That is why in the in the logo, the 2 is dropped like the oxygen symbol. And inside the O, there’s a heartbeat sign. And that heartbeat sign represents support, which is our business model, because we were giving all our software away for free, then sell support,” says Weerawarana.

After the initial angel investment, Weerawarana sought traditional VC funding from firms on Sand Hill Road in Palo Alto. Everyone turned him down once they heard the company was based in Sri Lanka, except one investor from Intel Capital, Pradeep Tagare, whom he met at an Open Source conference in 2006. Intel Capital then led WSO2’s A round funding for $4 million.

Through a series of acquisitions, Cisco wound up owning an investment in WSO2. In 2013, Cisco wanted to buy the company and offered $20 million based on $8 million in revenue. But WSO2 investor, Toby Capital founder and now Executive Chairman, Vincent Smith thought that there was a lot more WSO2 could do as an independent company. Smith then bought out the other investors, allowing the company to pursue its growth path and other investment options.

Yet the company hadn’t yet fulfilled its potential. Its products and technology were well received, but the company was suffering from a lack of market presence and sales. Weerawarana decided to step aside as CEO and the board brought in a CEO with sales and marketing experience. The new CEO didn’t work out as planned and the board decided to look for a new CEO. Then Covid hit in 2020 and the recruitment process came to a halt. Weerana was concerned the company was losing precious time and decided to throw his hat back into the CEO ring. “So, I went to the board and said, ‘I want the job if you think I’m the right guy for the job’, and the board was like, ‘Okay, yeah, let’s do it. I need five years to build this out. I don’t need any nonsense. And I’m going to make this work and we’re going to IPO the company. So that’s how I came back,” says Weerawarana.

Weerawarana was born and raised in Sri Lanka. He came to the US to complete his education earning his bachelor’s and master’s degrees from Kent State University and then earning his PhD at Perdue University before working for IBM. Despite spending so much time in the US, he is passionate about Sri Lanka’s future and is active politically as well for social issues. Some of his controversial political views, which he shares regularly on his blog, are not well received by the Sri Lankan political class.

“I’m very bullish about Sri Lanka because we have only 20 million people. We have incredible natural resources. Tourism can be a huge thing here. Our basic statistics are world class, life expectancy, healthcare, education, all world class. We just have a corrupt leadership structure that has repeatedly messed up the country for us,” says Weerawarana, who contributes both his time and resources to several Sri Lankan-based philanthropic initiatives.

Among his many initiatives, he is founder and chairman of the Lanka Data Foundation, a non-profit focused on archiving all public data in Sri Lanka, connecting dots to derive meaningful and accessible insights and delivering it to our citizens, businesses and government. He is also founder and chairman of the Avinya Foundation, whose vision is to bring dignity and pride to skilled workers by giving 16–17-year-old students the option to directly pursue a career focused on vocational education.

As for the future? Weerawarana is particularly proud of the company’s introduction of Ballerina, an open source general-purpose programming language designed by WSO2 for cloud-era application programmers, which he thinks will help identify both the company and Sri Lanka as a place for tech innovation. On the business side, Weerawarana says, “Our goal is to list in the US markets, and my preferred market is LTSE (Long Term Stock Exchange), not NASDAQ.”

-Bruce Rogers, former Chief Brand Officer, Chief Insights Officer and founder of Forbes Insights and the Forbes CMO Practice, is the Managing Director of CXO Research at the Revenue Enablement Institute.  This article was originally featured on forbes.com