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Golden's Rules: Open source ERP directions and predictions

Columnist Bernard Golden believes that the growing use of open source ERP is proof of an industry-wide shift away from traditional software vendors.

Over the past year, as I've attended open source conferences like LinuxWorld and the Open Source Business Conference, I've noticed an interesting phenomenon. The sessions have shifted away from Linux-specific topics and started including presentations on enterprise applications -- especially ERP. But why is this broader focus happening now? What does it mean? And what does it imply for the future of open source?

The familiar and comfortable world of open source is changing as its use increases. The challenge is to recognize the changes and be ready to accommodate them.
Bernard Golden,

Here are three things the increased presence of ERP as an open source topic means to you:

One: The shift away from commercial software is continuing and growing.

While open source originated in IT-specific software like compilers, firewalls, and Web servers, it is now moving to end user-facing systems. The continued interest in the Linux desktop is evidence of this move.

The newer interest in ERP represents more evidence. But it carries further meaning as well. ERP has been the province of big software vendors. Dissatisfaction with the pace and success rate of ERP implementations has been widespread.

One refreshing aspect of open source is the closer relationships possible between users and developers. Product communities typically allow both groups to interact and share knowledge. Open source users feel that they can influence the developers and product direction of their open source ERP product. This stands in strong contrast to the rather remote relationships typical of the enterprise ERP product world.

This shift means that open source is likely to be part of organizations' strategic decisions instead of merely being a technical choice confined to the IT group.

Two: Strategy means different participants.

Selecting an open source security tool is typically decided within the IT organization, and perhaps by a subset of it, like the security group. It would be unusual for the CIO of the company to become involved with the decision -- or perhaps even be aware of it.

When it comes to enterprise apps, however, that changes dramatically. Enterprise apps impact end users and end user organizations. When it comes to selecting one, CIOs are always involved. No end user is ever going to complain about the technical merits of an obscure application like an intrusion detection system. They will definitely sound off if the interface to their ERP system makes it difficult for their staff to do their job.

So, we can expect higher level IT management, and even end user senior management, to be involved in selecting open source ERP systems. If you've looked at the attendees of LinuxWorld, it's easy to see that this shift is occurring. More Dockers and fewer sandals symbolize the shift, but also reflect the reality that a broader audience is getting involved with open source.

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Three: The open source ERP ecosystem will change.

Until now, the users of these products have been very technical organizations with a bias toward open source -- in other words, open source enthusiasts.

As new participants and new organizations begin to consider open source ERP, they'll want to see the kinds of things they're used to accompanying commercial offerings - things like references, case studies, and TCO analysis. These requirements will affect not only the product providers, but also other members of the community, like service providers, training organizations, and so forth.

Just as the participants in the open source ERP community will need to change their expectations, the new participants entering the community will need to adjust their way of doing business as well. Many product providers and service organizations refuse to respond to RFPs, a staple of the traditional ERP selection process, due to the absence of license fees to support marketing and sales activities. Being told to download the product and decide if it's right for the organization will be a rude shock for IT shops (and their RFP consultants!).

The much lower costs of open source ERP are a benefit to user organizations, but when the changed economics of the industry meet the traditional user expectations, it will be interesting to watch.

Golden's Rule: Be careful what you ask for...

Many open source adherents have wished for the day when its use would spread to new organizations and more broadly within organizations. The increased interest in open source ERP shows that their wish is being fulfilled. Open source is becoming an industry-wide trend.

As the community grows, it's going to change. New members are less likely to focus solely on the technical merits of products and will be interested in other aspects as well - things like how many service providers there are, whether there's a certification program for technical personnel, and so on.

The familiar and comfortable world of open source is changing as its use increases. The challenge is to recognize the changes and be ready to accommodate them.

About the author: Bernard Golden is CEO of Navica Inc., a systems integrator based in San Carlos, Calif. He is the author of Succeeding with Open Source (Addison-Wesley, August 2004) and the creator of the Open Source Maturity Model, a formalized method of locating, assessing and implementing open source software.

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