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Open-source CRM and ERP: New kids on the cloud

By Esther Shein
October 30, 2009 06:00 AM ET

While Skaare is not interested in poring over code or writing script, he says it is appealing to know his staff could make little tweaks if they choose because of the flexibility open source provides.

The Cloud Edition costs $795 per user annually, which Skaare says was the "second least expensive option that I looked at."

   open source

With the ERP system taken care of, Skaare says he'll now be able to allocate one employee to direct sales, who previously was handling manual processes. "Now she'll spend her time talking to customers who are using our equipment and making sure they stay on their annual or semi-annual maintenance schedules."

Skaare estimates he has saved between $5,000 and $10,000 in capital costs by not having to invest in hardware. In addition, he'll recoup $75,000 to $100,000 savings annually by "the reduction in the amount of mistakes and in anticipation of someone being able to concentrate more fully on additional sales,'' he says.

Finally, he says, "I don't have to deal with losing man hours doing mundane tasks like server administration. The system is ready to go whenever and wherever I'm at."

A force of nature

R. Ray Wang, a partner with Altimeter Group, says that right now, open source in a cloud scenario is still a "unique situation," since typically, people who favor open-source applications are so hands-on, they're more likely to bring a system in-house than have it hosted on a cloud.

But there will be more of a movement toward on-demand, open-source cloud computing if the open-source vendors have reseller agreements with hosting providers to redistribute the code, says Wang, in San Mateo, Calif.

Echoing Skaare, Wang says that once the decision is made to move into the cloud, companies can concentrate on making their applications more relevant to their particular needs. "Once people realize they can do the hosting with open-source code . . . and make [products like] Compiere available with a lot of hosting providers," he says, "it will accelerate adoption of the products." If things work out, he predicts, cloud-based open-source applications could become 10% of the global $250 billion software market by 2015.

-- Johanna Ambrosio contributed to this story


Esther Shein is a freelance writer and editor. She can be reached at eshein@shein.net.

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