Should Open Source ERP Vendors Head To The Valley?
I read this nice post by Fabrizio Capobianco, CEO of open source mobile company Funambol. He got a chance to meet with Manel Sarasa, CEO of Opnebravo, and discuss the idea of moving the Openbravo headquarters to the silicon valley. Manel have been pondering on the idea for a while now, currently without concrete plans to make the move.
I was wondering if moving to the valley would be a smart move by Openbravo, or any other open source ERP vendors. To answer that question, you need to break open source ERP to two parts – open source and ERP.
As far as open source is concerned, I agree with Fabrizio’s argument that because there are many large open source companies headquartered in the valley, it’s a good place to be in. Networking is the main reason, and any businessman will tell you, you have to network to survive and flourish. Also, if you do have plans to be acquired by one of the large IT vendors (Oracle, Sun etc.), being located closer to them would definitely make the acquisition process easier.
ERP is a different story. Although all major ERP vendors (e.g. SAP,Oracle) have established presence in the valley, the typical ERP customer is not to be found anywhere in the vicinety. Additionally, since open source ERP solutions target small-medium businesses, the sales cycle and the actual implementation project is led by a channel partner, located geographicly closer to the customer. In that sense, there is no advantage to going west.
To summarize, if you are an open source ERP vendor and thinking about acquisition, the valley might be an attractive place for you. If your main focus is to grow your global partner and customer base, moving there will provide little added value, and will inflate your expanses (the valley is an expansive place, in case you haven’t heard). That money is better spent on acquiring new customers and improving your prodcut.
Just my 2 cents, tell us what you think in your comments.
