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January - 2011 - issue > Technology
Open Source ERP is Ready, Willing & Able
Tom Rodgers
The world of ERP has been dominated for years by the likes of SAP, Oracle, PeopleSoft and Baan. These ERP systems are broad and deep in functionality, but as we all know, are difficult to implement and often expensive to support. For the sake of argument we can say these are the 1,000-pound gorillas and are commonly known as Tier 1 ERP. Tier 1 software is meant typically for companies that have over $200 million in revenues with multi-location and country presence and these providers do a good job of meeting the majority of the functionality requirements across most industries. Then there are several Tiers of ERP that accommodate the needs of smaller companies and certain industry niches. They typically focus on user experience but have the same traits as the Tier 1 providers – closed systems built on proprietary development toolkits. That is not to say they cannot be integrated with other software, they can and are every day but it is more difficult and requires specialized functional and technical knowledge, all of which adds to the Total Cost of Ownership (TCO).
About 11 years ago an early adopter of Open Source technology within the ERP space began a journey. Who would have known what would spring from this start. Started by an ex-Oracle employee, Compiere ERP began a journey that included splits in the road that brought life to other ERP Open Source projects such as OpenBravo and ADempiere. Then there is OFBiz an Apache project with a much different architecture but strong to those who desire the specific benefits. Each project or company has its own approach and focus, but all have a common theme - an open technology stack that is easily accessible and modifiable. While functionality is broad, typically, it is not as deep as Tier 1 ERP. Is that really important? It depends, but for thousands of companies world-wide, including SMBs and large Distributors, the answer is a resounding NO (it is not that important).
Why do we believe Open Source ERP Is Ready, Willing and Able?
Stability
First, let’s focus on overall stability. For the most part, all of the Open Source ERP products mentioned above are stable. But stability comes in several flavors. Stability means that the project or company provides a consistent product that works and a methodology and toolset that can support new functionality when it is released. Not all Open Source providers are able to pass this test and this is one of the most important factors in Open Source ERP evaluation.
Reader's comments(4)
1:Dose anybody have a costing software created for Auto Sheet metal industry wherein variables are like gross weight, net weight, processing cost, scrap cost, raw material cost, profit, tool amortisation cost etc.
2:It also depends on what form of a business model does the software vendor follow. Have to agree with Steven that there are commercial versions of open source ERP too where total software libre isnt maintained. At OpenERP community there was a significant debate on this issue and keeping this in mind we came up with a new model. You can read further here bit.ly/cFTK5f.
Do agree regarding the reluctance among the SMB\'s and large distributors. We too faced a initial challenge in Asian market. But slowly things have improved and with version 6.0, we had 4 partners in Indonesia signing up. Hence I think things are getting better, acceptance of open source is increasing and hope the each players reach the stage to compete with the Tier 1 players.
Do agree regarding the reluctance among the SMB\'s and large distributors. We too faced a initial challenge in Asian market. But slowly things have improved and with version 6.0, we had 4 partners in Indonesia signing up. Hence I think things are getting better, acceptance of open source is increasing and hope the each players reach the stage to compete with the Tier 1 players.
3:Hi Tom,
I enjoyed your article.
You mention Compiere, say that \"Commercial Versions Generally Payoff\" and later talk about about proprietary ERP offerings being acquired and killed. It is ironic that the Compiere software was recently acquired by a proprietary software vendor. Existing Compiere users on a \'commercial license\' and presumably dependent on functionality not in the \'community version\' are now subject to the commercial aims of the new owners. In contrast, those on the community licensed version are minimally affected and may just have to look for someone to provide support.
If you take the \"Commercial Version\" you get a proprietary software license rather than an open source license and you may not even have access to all the code (I believe this is the case with Compiere). So you are not really in control of your own destiny. You may have gained some small amount of functionality but in doing so you have given up many important benefits of open source.
These issues are explored in an interesting article here...
http://www.h-online.com/open/features/The- Open-Source-Enterprise-Trap-746559.html
Using a community edition of (for example) Compiere or a pure community developed and supported offering like ADempiere can be attractive. It is possible to get the same integration to third party offerings without going down the commercial license approach. If the integration has not already been done by someone in the community you may have to do/commission some work yourself but the cost will probably be less than the ongoing annual commercial version license fee.
Disclosure: I work for a business that deals only with \'community version\' software products.
I enjoyed your article.
You mention Compiere, say that \"Commercial Versions Generally Payoff\" and later talk about about proprietary ERP offerings being acquired and killed. It is ironic that the Compiere software was recently acquired by a proprietary software vendor. Existing Compiere users on a \'commercial license\' and presumably dependent on functionality not in the \'community version\' are now subject to the commercial aims of the new owners. In contrast, those on the community licensed version are minimally affected and may just have to look for someone to provide support.
If you take the \"Commercial Version\" you get a proprietary software license rather than an open source license and you may not even have access to all the code (I believe this is the case with Compiere). So you are not really in control of your own destiny. You may have gained some small amount of functionality but in doing so you have given up many important benefits of open source.
These issues are explored in an interesting article here...
http://www.h-online.com/open/features/The- Open-Source-Enterprise-Trap-746559.html
Using a community edition of (for example) Compiere or a pure community developed and supported offering like ADempiere can be attractive. It is possible to get the same integration to third party offerings without going down the commercial license approach. If the integration has not already been done by someone in the community you may have to do/commission some work yourself but the cost will probably be less than the ongoing annual commercial version license fee.
Disclosure: I work for a business that deals only with \'community version\' software products.
4:Tom, very balanced and informative piece. Open source ERP has indeed come of age, and it is a very good point re: how easy it is to integrate with other applications.
At Openbravo our partners have taken it one step further, creating drop-in integrations with other premium open source enterprise applications like Magento, Alfresco, and SugarCRM. So for partners and end customers, enabling the integrations becomes a matter of configuration, not coding.
As you say, the strategic enabler is the \"modern and mature Open Source architecture\" underneath. With the maturation of easy-to-integrate open source ERP as the backbone--alongside all of the other great open source enterprise applications now available both onsite and cloud-based--I suspect the pendulum may start to swing back from \"single vendor / all in one solutions\" to \"best of breed\". What do you think?
At Openbravo our partners have taken it one step further, creating drop-in integrations with other premium open source enterprise applications like Magento, Alfresco, and SugarCRM. So for partners and end customers, enabling the integrations becomes a matter of configuration, not coding.
As you say, the strategic enabler is the \"modern and mature Open Source architecture\" underneath. With the maturation of easy-to-integrate open source ERP as the backbone--alongside all of the other great open source enterprise applications now available both onsite and cloud-based--I suspect the pendulum may start to swing back from \"single vendor / all in one solutions\" to \"best of breed\". What do you think?
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