Energized by open source: Ditching closed apps spurred growth, utility says

A shift to open source has been wildly successful for BlueStar Energy.

Six-year-old BlueStar Energy Services Inc. doesn't have the kind of systems-baggage that saddles many older organizations. Still, the Chicago-based company found itself hindered by the rigidity of its core systems, which constrained its efforts to expand its customer base and offer new services.

Those barriers to growth led the company to embark on a bold effort to replace the bulk of its IT infrastructure -- including voice, e-mail and financial systems -- with open-source software. The initiative has been so successful that CEO Guy Morgan attributes much of the company's recent growth to it.

BlueStar's open-source push has been driven by Tom Keen, the company's chief technology officer since June 2006. While evaluating BlueStar's IT architecture and business systems as a consultant, Keen had seen an opportunity for open-source systems to provide the company's operations with greater flexibility and scalability while strengthening its ability to expand into new markets.

For example, the ERP system, which was written in Macromedia Inc.'s ColdFusion, suffered from scalability constraints. BlueStar supplies electricity to customers in Illinois, Maryland and Washington, D.C., and needs to gather heaps of customer meter data for billing.

The company was paying third parties for electronic data interchange (EDI) data feeds, and batch-processing billing runs often kept BlueStar workers on the job late into the night. The system, which operated on a Dell server running Windows 2003, was "pushed out to the edge," says Keen, and that restricted the company's ability to expand its customer base.

"The most pressing concern for me was the rigidity of the ColdFusion system," says Morgan. "Our business is in a very fluid regulatory environment. Things change all the time, and our infrastructure has to adapt to those changes. I felt like we were constantly putting a Band-Aid on the problem."

The Open-Source Pitch

Even though Morgan recognized the shortcomings of his ERP system, Keen still had to sell him on the merits of shifting the IT architecture to an open-source approach. "Guy couldn't understand why, if open-source technologies are so good, you could just give it away," says Keen. "He just didn't get it."

To help convince Morgan, Keen had him visit a Web site for SugarCRM, an open-source CRM system that boasts a number of Fortune 2,000 customers.

"The thing that convinced me is that a number of well-established companies were adopting [open-source] technologies early on," says Morgan, noting that open source "started to make sense to me."

Still, Morgan's confidence had its limits. "He trusted what we were doing, but his trust had a rope with a noose on the end of it," says Keen.

In November 2006, Keen and his team began developing a prototype for a new e-commerce and billing engine that would be part of an open-source initiative called NextStar. The system would support BlueStar's customer enrollment, billing, e-commerce, accounting, cash management and other financial operations.

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