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OpenSourceERP - Tales of success may be greatly exaggerated
JasonC
Member Posts: 31
An article last week on CFO.com got me thinking about open source ERP again. I think we had a discussion on this board about Compiere some time ago. The article highlighted another open source ERP project called Openbravo. Apparently a couple of months ago the number of downloads of Openbravo passed the 1,000,000 mark. That's how the success of these products is typically noted, but it is pretty much a meaningless statistic.
Compiere was the first of these project that I remember getting media attention. There is some Oracle DNA at the top of the company and in one story the founder was quoted as saying that he doesn't view other open source ERP projects as competition. His competition is Dynamics. Compiere got a bunch of attention as its download number from SourceForge (a site that tracks open source projects) reached into the hundreds of thousands. Like other open source business solution providers the revenue is in the services side of the business. Based on estimates of total revenue and Compiere’s service pricing I estimated that as little as 0.1 % of the downloads equate to actual customers.
Openbravo just boasted of passing the 1,000,000 download milestone. Yet from the notes of an attendee at the Oct 2007 Openbravo World Conference (attended by 120 people) there were at that time less than 100 live customers (80% of those in Spain). The download number comes from now and the live customer number from over a year ago, so the ratio may not be exactly 0.01%, but you get the point. Let's say that half of those downloads have come since Oct 2007. That still means the live customer number is just 0.02% of the download number.
Taking this further, if the customer has 20 users, do they download the software 20 times to install on each PC? You get the point, inflated download numbers are indicative of web traffic, not of user adoption. Businesses should take that into account and not be wowed by "1,000,000 downloads!".
I don't think this model is going away, but it's not about to take over the ERP market either. Per the CFO.com article, Gartner Group predicts that by 2012 more than 90 percent of enterprises worldwide will deploy open source software in one form or another. The vast, vast majority of that will not be in the area of ERP.
And besides, Gartner Group's predictions are only about 71% accurate, and even then only 54% of the time (0.4 probability).
Has anybody on this board had any recent encounters with open source ERP or CRM products?
Jason
www.partnercompete.com
Compiere was the first of these project that I remember getting media attention. There is some Oracle DNA at the top of the company and in one story the founder was quoted as saying that he doesn't view other open source ERP projects as competition. His competition is Dynamics. Compiere got a bunch of attention as its download number from SourceForge (a site that tracks open source projects) reached into the hundreds of thousands. Like other open source business solution providers the revenue is in the services side of the business. Based on estimates of total revenue and Compiere’s service pricing I estimated that as little as 0.1 % of the downloads equate to actual customers.
Openbravo just boasted of passing the 1,000,000 download milestone. Yet from the notes of an attendee at the Oct 2007 Openbravo World Conference (attended by 120 people) there were at that time less than 100 live customers (80% of those in Spain). The download number comes from now and the live customer number from over a year ago, so the ratio may not be exactly 0.01%, but you get the point. Let's say that half of those downloads have come since Oct 2007. That still means the live customer number is just 0.02% of the download number.
Taking this further, if the customer has 20 users, do they download the software 20 times to install on each PC? You get the point, inflated download numbers are indicative of web traffic, not of user adoption. Businesses should take that into account and not be wowed by "1,000,000 downloads!".
I don't think this model is going away, but it's not about to take over the ERP market either. Per the CFO.com article, Gartner Group predicts that by 2012 more than 90 percent of enterprises worldwide will deploy open source software in one form or another. The vast, vast majority of that will not be in the area of ERP.
And besides, Gartner Group's predictions are only about 71% accurate, and even then only 54% of the time (0.4 probability).
Has anybody on this board had any recent encounters with open source ERP or CRM products?
Jason
www.partnercompete.com
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