While cost is a large part of the equation, Jenkins says that it's not the only reason Backcountry.com is committed to open source. "At the end of the day, the most important thing to this company is innovation. We want to do crazy, kooky things in retail."

Not surprising for a company that seems full of crazy, kooky people. The corporate atmosphere at Backcountry is nothing if not iconoclastic. Like many dot-com companies, there are no dress codes, no set hours and no offices, except for those of Bresee and CEO Jim Holland, who share a simple, unadorned workspace. Like his IT staff, Jenkins works in a six-by-six-foot cubicle made of particleboard and brushed aluminum. Staffers test and retest all equipment and clothing the company sells—and most spend as much time as possible outdoors. The irreverent culture makes open source a perfect fit, Jenkins says. "Everyone is encouraged to come up with their own projects. The company can only benefit by the free, unfettered exchange of information and ideas, and we preserve that entrepreneurial culture by allowing everyone in the company to share ideas."

Resource Library:

Those ideas are tracked on a companywide knowledge management system called "The Goat," which Bresee calls "the heart and lungs of the company." The intranet, named after the company's trademark, is actually a wiki—open-source software that lets any user create or edit content regardless of which browser they use (think Wikipedia). Backcountry's wiki has already grown to more than 6,200 pages. "Every process, every piece of institutional knowledge shows up on The Goat," says Jenkins, "and any employee can edit any page they choose. It's our way of creating a true idea factory." Nearly all the company's initiatives spring from The Goat, Bresee says.

Case in point: SteepandCheap.com, a Web site the company originally set up as a means to flush out stale inventory ("the dusty stuff in the corner," Jenkins says). Taking a cue from Woot.com—a site that sells just one discounted electronics product per day—SteepandCheap.com took just three weeks to build and launch after the concept was approved in February 2005. Now, it has 100,000 unique visitors each week, a figure that is growing 15 percent a month. Backcountry.com sells one item each day on the site—and it almost always sells out. "It's great for us," says Dustin Robertson, Backcountry's director of marketing. "Our high-end suppliers don't want to see their products out there on sale with discount retailers, so this is a great way for them to let us take unsold inventory and get rid of it all in one day." It's also a quick way to make a buck—on a good day, SteepandCheap.com rakes in as much as $26,000 in sales.

Open source also helps the company closely track its advertising spend. Backcountry.com uses Atlas Search (formerly Atlas OnePoint) from a Seattle-based company called aQuantive Inc. to oversee its keyword bid management—a crucial tool for online retailers reeling in shoppers through Web searches. Jenkins estimates that keyword-search marketing leads to 30 percent of the company's revenue. But it's not easy to manage. "Backcountry has close to 80,000 SKUs, with lots of keywords," Jenkins says. "If you're not careful, you'll pay for those keywords even if you don't have the product to sell anymore."

To keep that from happening, Jenkins' team created an open-source Perl script that monitors inventory so that keywords drop away from the bidding pool when stock supplies run out. The script saves the company hundreds of thousands of dollars each quarter out of an advertising budget of several million, says Jenkins, and is a prime example of how open source creates value. "When we decided to do this, there was no off-the-shelf product that could handle it," Jenkins says. "It would have taken Accenture or IBM months to put something like this together for us."

Next page: Using Tech for Fast Growth