Open Source ERP Guru

I’ve just finished reading the first part of Computerworld ‘The future of ERP‘ story. It’s a long article, well written, and puts  several  good questions on the table – is the vision of ERP, as a single, central application, managing all data as well as business transactions , dead? Did the latest economic crisis, along with the advent of disruptive technologies (cloud computing and open source ERP) made CIO re-think their entire ERP strategy?

Large enterprises, deeply invested in current SAP or Oracle implementations, despite being sunk deep to their throats in yearly maintenance fees,are not likely to abandon their multi-million dollars investment for a different solution (a SaaS ERP or an open source ERP offering), according to the story. What is happening is a change in the dynamics between the megavendors – SAP and Oracle – and their customers, as large customers are able to re-negotiate maintenance fees, which have become a sour point in the ERP vendor-customer relationship.

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We wrote about hosted ERP systems a while back, and it’s getting more and more clear that the the ERP cloud is only getting denser. It’s evident in proprietery ERP solutions, where NetSuite, a cloud-only ERP offering is stealing customers away from traditional, on premise ERP vendors, and it’s evident in the open source ERP industry, as all major vendors are offering a hosted version of their ERP offering.

The latest addtition to the ever growing potroflio of on-demand ERP solutions is coming from Openbravo. OB now offers a cloud appliance, which is a pre-packed stack of everything you need to run Openbravo ERP, all easily deployed on pyshical hardware or virtual machines (did anyone say Amazon Web Services?).

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ISO Implements Compiere ERP

ISO is the worlds largest standards organization, setting international standards for any imaginable industry – from high tech to oil drilling, from quality assurance to software development. Compiere, a leading open source ERP vendor, announced that ISO has selected its solution to run their daily operations.

ISO is not a manufacturer or a distributor, but rather a service company. It manages over 18,000 different standards and gets over 5,000 customer orders a month. Compiere ERP will handle mainly products and sales cycles. Great news from Compiere!

Openbravo new partner program

Openbravo announced a new partner program. If you are interested, you can become any of 4 types of partner: Registered, Certified, Gold, and Platinum. That replaced the old partner types of system integrator, ISV and VAR.
I’ve always claimed that one of the key factors to open source ERP solutions success is the partners ecosystem. Openbravo already has over 100 partners in over 40 countries, and the new program is aimed at growing the community further.
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Open source ERP vendor Openbravo yesterday announced the release of Openbravo 2.50 – you can download it from here. From a product perspective, the most important feature of this release is Modules. Openbravo now provides the platform required to extend its ERP offering, but it’s up to the community and partners to take Openbravo to the next level of ERP by building industry solutions and other generic extensions on top of OB’s modular architecture. An extensive modules library should make OB a more attractive ERP offering and a better competition to proprietary ERP solution, by further cutting costs of implementation projects (modules cut the costs of customization).

From a service prospective, Openbravo redesigned their service offering and renamed it Openbravo Professional Subscription. OB services now target two markets – SMB and the enterprise. The main difference (other than the price , of course) is support for clustering, which is often a necessary (yet not sufficient) condition for critical information systems in the enterprise. The service repackaging lines up Openbravo with other enterprise software vendors, cutting prices and simplifying price structures in times of recession.

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One of our favorite open source ERP solutions is Apache OfBiz. Apache projects are ‘notorius’ for being of very high quality. The Apache web server literally powers the Internet and is considered one of the best applications ever written. OfBiz is Apache’s take on business management software, and can either be used as an out of the box ERP solution, or as a robust framework for building new ERP solutions on top of.

One of Ofbiz’s main areas for improvement was its user interface. Much attention have been put into the underline data structure, business logic and services layer, while the look and feel of the application was somewhat neglected. A few months ago Ofbiz released a themes engine, enabling developers to build and share their own themes with the community. Themes has the potential of making Ofbiz a much more compelling ERP solution, but it really depends on the community’s contribution. A couple of themes releasedby the community can be found here.

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Several months ago we speculated about a possible acquisition of an open source ERP project by one of IT megavendors – IBM, Sun or Oracle. Much have changed since then, especially for Sun, who lost a lot of its value as a public company and became an easy target for an acquisition.

Rumors of talks between Sun and IBM surfaced a couple of weeks ago, but apparently IBM was not eager enough to put the money on the table. But Oracle was never (and will probably never be) afraid of acquiring other companies.

As of the time of writing it is not clear if it’s officially a done deal, but Oracle is to buy Sun for about 7B$. The implications on enterprise IT are huge, with two dimensions directly related to open source ERP – open source and enterprise applications.

Sun was the leading open source software vendor. It released several high end software products as open source ( the Java programming language, the Open Solaris operating system and many other smaller projects). It also acquired MySQL, the leading open source database software a few months ago. Oracle ,on the other hand, is synonymous with proprietary software, especially in the ERP market.

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Not only is cloud computing a hot trend these days, it also makes a lot of sense in the context of the open source ERP industry. Cloud, or Software as a Service(SaaS) offerings, appeal mostly to the huge SMB market. Compiere, one of the leading open source ERP vendors, announced it will offer a version of its ERP software to be deployed in the Amazon EC2 cloud.
Compiere’s EC2 offering tries to bring the good from both worlds – traditional on-premise ERP systems and modern SaaS offerings. Most current SaaS platforms run multiple customer instances on the same server. Compiere cloud edition, based on Compiere professional edition, lets customers run their ERP instance on their own virtual, yet private, server.

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Barcelona is an amazing city, some would argue the most attractive tourist destination in the world. You don’t need many excuses to go their – great weather, best football(soccer?) team in the world, and the Dali museum is a short ride away.
Openbravo, one of the leading open source ERP vendors, is holding the 3 days Openbravo World Conference 2009, April 17th, in Barcelona. I was glad to find out that the main theme of the conference is the open source community around the Openbravo project.
The sponsors list is impressive. I was surprised to find Oracle as a gold sponsor. I didn’t know Oracle takes part in several open source initiatives, but I’m still wondering which oracle is sponsoring the event – the successful database maker (Openbravo runs on Oracle’s DB), or the ERP vendor vacuum cleaner. Either way, you must be doing something right when one of the worlds’ largest business software companies sponsors your event. Other sponsors include more obvious sponsors such as IBM, Sun, Talend (open source integration) , Canonical (Ubuntu Linux) and our friends at ERP.com, where I occasionally guest blog.
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It’s earnings season for open source ERP vendors, and growth is phenomenal. Following record results reported by Compiere, a leading open source ERP vendor, xTuple reports an astonishing 250% growth in revenue in 2008, year over year. Since all vendors in this space are privately held companies, we do not have actual revenue figures, but growth across the sector is impressive.
In times when proprietary ERP vendors report slowing revenue growth and layoffs, attributed to the economic slowdown, growth of open source ERP vendors (in the triple digits) is truly unique . Since many organizations are now more cost aware, the obvious cost advantage of open source ERP (no license fees), along with a critical mass of production customers and a new level of maturity, both in terms of technology and channel partners, make these solutions an option any smart CIO must consider.
xTuple also reported their customer base more than doubled during 2008, another tremendous achievement by the xTuple team, led by CEO Ned Lilly. We couldn’t put it any better than Ned did:

“We are very pleased with our success in 2008 and are seeing continued growth in 2009, as larger enterprises scrutinize their current software vendor relationships, and growing companies look for greater visibility into their operations to maximize profitability in tough times. The current economic climate has made more urgent the need for low-cost, high-value solutions that deliver immediate return on investment. As a result, more companies are looking to open source solutions. xTuple has been at the forefront of bridging the worlds of open source and ERP software, and will continue to innovate and lead in response to this massive market need.”

Will 2009 be the year of open source ERP?

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.

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