One-man Irish firm has developed innovative web-based software, writes John Collins

The vast majority of web surfers have probably never heard of web companies and services like online photo-sharing site Flickr, web word processor Writely, or social bookmarking service del.icio.us.

But that hasn't stopped the behemoths of the web - Google and Yahoo! - paying millions of dollars to snap up these early-stage software companies who had minuscule revenues but a loyal userbase.

Along with news aggregation services such as digg, alternative web browser Flock, and a host of small US and international start-ups, they are being hailed as the vanguard Web 2.0, a richer web experience that puts users rather than publishers at the centre.

Perversely, one of the most common debates that rages - usually on blogs rather than in the mainstream media - is what exactly constitutes a Web 2.0 company or service.

One thing they have in common is a focus on enabling users to create and share content, often using an application that would traditionally have been installed locally on a PC rather than on a website.

Web 2.0 services tend to make use of technologies like Ajax (a synchronous javascript and XML), which allows for richer and more interactive web pages; CSS (cascading style sheets) so that data can be presented in a range of ways; blogging; and RSS (really simple syndication) so that users can be notified when new content is added.

One of the less-discussed impacts of the Web 2.0 movement is that it has significantly lowered the barriers of entry for entrepreneurs looking to establish their own software companies.

One Irish software engineer capitalising on the new paradigm is Walter Higgins, founder and chief programmer at his one-man company Sxoop (pronounced "scoop").

The company's first product is PXN8, an online photo editor that uses all the technologies associated with Web 2.0 such as Ajax, CSS and Javascript.

The project is a sideline for Higgins, who maintains a day job as a programmer with an unrelated company in Cork.

"Because I'm the developer as well, the only cost I have is hosting - assuming I don't charge for my own time," says Higgins.

"I'm currently using a hosting service in the US. I will probably have to invest in my own dedicated server, but that will be paid for out of my revenues."

Higgins admits he is not a photography expert and that the "domain expertise" comes from his wife. He describes her as a "keen photographer and Photoshop guru".

Using her knowledge of photography and Higgins's programming expertise, PXN8 was developed over a couple of weeks of evenings and weekends last year. It was quietly launched in October with a posting to a Flickr forum and since then it has snowballed.

The software allows users to upload their own pictures and carry out simple editing tasks such as cropping, resizing, removing red-eye and whitening teeth with the click of a button.

Although Higgins says he hadn't initially considered the software in relation to other companies, he soon began to receive queries from organisations looking to include the software on their own websites.

In November, he began to develop PXN8 in such a way that it could be installed on other web servers and the first sale came in January of this year.

After three months, revenue from licences generates as much as his day job.

"Unlike most Web 2.0 companies, which appear to be built with the sole purpose of being sold to Yahoo!, Google or Microsoft, we actually have a business model and have revenue," says Higgins. "Sales have been slow but steady. I haven't given up my day job and have no plans to do so."

Sxoop has adopted a very simple business model - the software is free to use online at www.pxn8.com and from there photographs can be saved to the user's hard drive or to the Flickr photo-sharing site. Higgins charges just $749 (€622) per web server for a lifetime licence to organisations that want to include the software on their own sites. To reduce the administration overhead for himself he accepts payments through e-Bay's PayPal service.

Higgins initially expected that the main customers would be online printing and photo-sharing services, but in fact customers have come from a diverse range of sectors.

One of the earliest to sign up was Where.com, which enables users to share pictures from their camera phones. But recent customers have come from the education sector, including a British university.

Higgins describes it as a micro- ISV (independent software vendor), a new class of software company that has already got its own entry on online encyclopaedia Wikipedia.

He is happy to admit he doesn't have a grand vision for the company. Instead, he intends to stick to what the company knows (software and photography) and he is not actively looking for outside investment to grow.

Sxoop has adopted what could be called a "guerrilla" approach to marketing. Rather than spending on advertising or promotion, Higgins - once a regular blogger himself - "seeded the product with a couple of people".

The resulting traffic and sales he has generated proves that blogs have some influence, according to Higgins.

It probably also helps that PXN8 has received mentions from the likes of Yahoo! Japan, influential US technology broadcaster Kim Komando, and Yahoo!'s Tom Coates who described it as " pretty stunningly hardcore" and suggested someone should give it a "bajillion dollars" for development.

However, Higgins is not getting carried away or assuming that the rules of building a software company have suddenly been turned on their head.

"It's really cheap to start off and get some revenue coming in, but you still have the same problems of scale if you want to roll this out to a larger audience," he says.