Open source ERP usage small, but growing, in small business
Forrester analyst Jeffrey Hammond's recent LinuxCon keynote contained a wealth of data [PDF], including a view of open source adoption by software category across company sizes.
According to a fourth-quarter 2009 survey of more than 1,900 IT decision-makers, companies with 20 to 999 employees were 50 percent more likely to have adopted open source CRM and ERP business applications than companies with more than 1,000 employees.
It should be noted, however, that only 9 percent of companies surveyed with 20 to 999 employees were using an open source ERP offering. But the adoption rate for ERP was higher than for portals, such as Liferay, or for business intelligence tools, such as Jasper Reports, across companies of all sizes.
All this begs the question: Could an open source ERP package be right from your small business?
When to consider open source ERP products
Ned Lilly, CEO of open source ERP vendor xTuple, tells me that his company is seeing strong interest from two types of customers:
- Companies with annual revenues of $5 to $50 million that are outgrowing the capabilities of QuickBooks. Previously, their only logical choice was a small-business version of SAP or Oracle Applications. However, the complexity of an SAP or Oracle Applications implementation and the time required to deploy it ultimately forced customers to make do with QuickBooks.
- Midsize companies that adopted an ERP package in the lead-up to Y2K and are now beginning to consider alternatives that provide greater flexibility without the need for an army of consultants and at a much lower cost. Access to source code, either directly or through service providers, is a key attraction to companies in this second camp, Lilly says: "We hear anecdotally from partners and customers that implementations are faster because of open architecture and ability to make low-impact changes to the source code or extensions around the core."
A quick survey of major open source ERP vendors
xTuple has a user community of more than 25,000 active members. Openbravo and Compiere, both previous winners of InfoWorld's Best of Open Source in the ERP category, are two other leading open source ERP products.
In addition to a traditional software package, Openbravo offers its ERP package as a software or hardware appliance to further simplify and cut deployment costs. Openbravo also boasts a large partner network, which can help midsize companies evaluate and adopt an appropriate product.
Compiere, on the other hand, was recently acquired by Consona, and coverage of the acquisition suggests that Compiere needs to refocus on its users, partners, and community if it hopes to grow again.
Businesses of any size -- but especially small businesses that don't have an ERP system in place -- that are considering ERP are encouraged to evaluate several packages. This, of course, is made easier through the low barrier for open source offerings.
This article, "Outgrowing QuickBooks? Maybe open source ERP can help," was originally published at InfoWorld.com. Read more of Rodrigues et al.'s Open Sources blog and follow the latest developments in open source at InfoWorld.com.