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Denise Holland Vetting Open Source CRM Software
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 By Denise Holland

A Hopeful but Cautious View of Open Source CRM Software

Open source software is making waves in enterprise IT; even so it's a flood short of a tsunami when it comes to Customer Relationship Management (CRM) software applications. While open source CRM systems offer advantages in eliminating acquisition costs and offering source code flexibility, market growth has yet to take off. The bulwark preventing its rise is sometimes built of open source's own limitations and other times enterprises' non-compromising and increasingly inflated expectations when it comes to mission critical business systems.

The expectation of free equaling something-for-nothing often provides the first letdown. The second may come from the deflated promises of maintainability, reliability and scalability.

"Either through changes made to the core system to conform to the client's desire to function in a certain way, which does away with the design intent of the initial solution, or through deployment in less-than-ideal setups to save money, the planned and core functionality is not always deployed," explains noted CRM analyst and strategist, Esteban Kolsky, president of thinkJar.

"While this could be considered a problem for all solutions, most of the commercial solutions are not going to work at all in similar situations, so open source is at a disadvantage provided by its own flexibility," he added.

Kolsky noted that the SugarCRM 6.0 version touts a built-in set of features to counter this problem but says such a claim is yet to be substantiated, and in reality, may only work for a small number of scenarios.

Free versus Cheap
The initial appeal of open source is most often its freebie nature – especially in the current economic climate.

"Most organizations look at open-source CRM software as a way to cheaply and easily deploy CRM," says Kolsky. "And to an extent, it is true – it is cheap."

"However, open-source CRM systems suffer the same problem as most other open source enterprise software solutions: they are not always trusted at an enterprise level, have the potential for high vulnerability, and -- most importantly -- are not so cheap in the long run," he explained.

Indeed, the 'free' part of open-source CRM software is on the front-end; the potential budget-buster typically comes later. Initial licensing is free – unless you buy support or additional fee-based modules, but even those come at a much lower cost than commercial counterparts.

"However, the cost of modifying or integrating open-source CRM software into other enterprise systems and databases is often higher, requires more customization at a similar cost as commercial CRM packages, and the long-term implications of deploying open source software may include high-costs of maintenance versus comparable commercial solutions," says Kolsky. "And I am not talking about maintenance licenses or costs, just what the organizations must pay to maintain their own solution."

Platform is not the Key Question
Open source works fine in standardized operating systems or uniform enterprise applications "but not for collaborative, multi-user applications like CRM, supply chain planning, accounting systems, ERP software, etc," says J.B. Kuppe, vice president of Marketing at Boardwalktech.

Kuppe's statement highlights the problem at hand; the platform isn't the key question to be asked.

"Enterprises have come to understand that open-source is just a feature of a product -- the software product has to stand on its own merits whether-or-not you can see the code," explains Amit Dav, president of salesElement, a proposal automation company that integrates with six major CRM systems (both open source and proprietary).

"If it's a solid product, like SugarCRM for example, then the open-source feature is a nice to have, especially if other parts of your business are using PHP," he says. "However, it's unlikely someone will make a pure buying decision, especially enterprises, based on the fact that a product is open source."

Open-source CRM software is also beginning to lose some of its unique advantages to proprietary systems.

"CRM software companies like Salesforce.com have created their own language (Apex with Force.com) to let developers extend the product and others have SDKs that let you substantially add features -- essentially providing a lot of the value that open source brings," explains Dav.

"Few will argue that open source isn't a plus, but often, it's the speed of deployment and features of the system that determine the value," he added. End

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Comments — Comments for this page are closed —

Guest Chris Nichols
  I think open source for business applications—CRM, ERP, Manufacturing, Supply Chain, HR and even Payroll—is at an early tipping point. Arguments that open source software isn't ready for enterprise applications or heavy lifting are outdated and falling on deaf ears. Nor can benefits such as limitless extensibility and freedom from vendor lock-in be denied. To some, a final caution is whether open source software providers possess staying power as evidenced by viable business models. However, this too may be an over weighted consideration born from the proprietary software business model. Unlike commercial closed source software vendors which must stay in business to continue their support and advancement of the software, open source solutions can continue to survive and even thrive without the original vendor or provider from which the solution was acquired. In a successful open source model, the power of the decentralized community is far more potent than any single player, including the creator.

Guest Jeff Whitman
  Open source CRM and other business applications will indeed disrupt the existing (commercial, closed-source) business applications software industry. I was fascinated to read a March 2011 article by Gartner where the analyst firm surveyed 547 IT leaders in 11 countries and found that "more than half of our survey respondents have adopted OSS [open source software] solutions as part of their IT strategy. In fact, OSS makes up nearly one-third of responding organizations overall enterprise software portfolio, which is interestingly enough, about the same as the proportion of internally developed software." Another interesting finding was that increased adoption of open source software was not just about saving money, although that was a factor, but other important objectives such as faster acquisition, increased flexibility, improved innovation and shorter development cycles played heavily into the decision making process. It is only a matter of time before open source disrupts the business apps software industry.
 

 

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Most organizations look at open-source CRM software as a way to cheaply and easily deploy CRM. And to an extent, it is true – it is cheap. However, open-source CRM systems suffer the same problem as most other open source enterprise software solutions: they are not always trusted at an enterprise level, have the potential for high vulnerability, and -- most importantly -- are not so cheap in the long run."

Esteban Kolsky, President of thinkJar

 

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Open Source CRM Software

Low acquisition costs, the utmost extensibility, new delivery channels such as SaaS and the cloud, freedom from vendor lock-in and growing support ecosystems are driving increased attention and exploration of open source CRM solutions. This channel focuses on open source CRM software news, views, research, experience and insight.

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