Is Open Source CRM Ready to Compete?

With its low cost of entry and flexibility, open source software is becoming more attractive to a growing number of businesses, even for mission-critical applications such as customer relationship management (CRM), enterprise resource planning (ERP) and business intelligence (BI).

Unlike commercial applications, where the software developer owns the code that controls the program, in open source software the code is, literally, open and customizable. Small and midsize businesses often consider open-source CRM systems because they lower up front capital expenditures such as software license costs and upgrade costs. In addition, open-source CRM adopters are not locked into vendor contracts or forced upgrade paths.

More than 300 IT companies have deployed enterprise open source software for reporting, data integration or database analytics, and more than one-third of 1,000 IT professionals surveyed soon plan to evaluate open source for analytics, according to a report by Mark Madsen, president of Third Nature and author of the report "Open Source Solutions: Managing, Analyzing, and Delivering Business Information," published by BEyeNetwork.

"Open-source rose quickly in the information management market, from almost nothing a few years ago to community- and commercially supported projects for every possible use," Madsen wrote.

Although some fear open source is available only to the technologically-astute, that is not the case, Matt Asay, chief operating officer at Canonical, the company behind the Ubuntu Linux operating system, told CNET. "Does this mean that the only way to benefit from open-source CRM (and other open-source enterprise applications) is if you're a technology-savvy shop? Of course not. Most don't need to tweak the code, and never will. But even those who don't benefit from those who do," he said.

Growing Playing Field

A number of developers have written CRM software solutions based on open source, perhaps the best-known being SugarCRM. By selecting a developer's open source-based solution, you have the best of both worlds: A software written in an open language, with the support of a developer behind it.

SugarCRM offers on-demand and on-site versions available for both enterprises and small and midsize businesses, The company's software encompasses sales, marketing and customer service. The publisher has over 10,000 customers, and a network of global partners that develop bolt-on applications for its business software.

"SugarCRM is the "ne plus ultra" in this market. In my opinion, it stands head and shoulders above all the other vendors," said Paul Greenberg, author of the best-selling "CRM at the Speed of Light" and president of The 56 Group, a customer strategy consulting firm, focused on cutting edge CRM and social CRM strategic services. "There is, honestly, no vendor even close to SugarCRM when it comes to open source CRM."

But there are contenders to the throne, including Carousel CRM; CentraView; CiviCRM; Compiere; Concursive; Cream CRM; epesiBIM; Hipergate; junariCRM; MobileReflex; OpenCRX; Opentaps; Orange Leap; SplendidCRM; Tustena CRM; Vtiger, and XRMS CRM. Some, such as Orange Leap, specialize in particular vertical markets, while others are aiming squarely at horizontal businesses and larger markets.

Great for Some, Not for All

The biggest drawback to open source can be the amount of internal acumen required, experts said.

“Small shops lacking in tech skills would gain much more benefit from access to quality support, more UI polish and better documentation commonly found in commercial apps," John McMahon, CEO of Extentech, told Insider CRM.

In addition, CRM open source software features and the user interface could lag behind those of commercial applications, he said. And, if projects do not have internal support, they could easily die before completion, McMahon cautioned. While open source CRM is a great alternative to completely home-grown CRM applications, commercial alternatives typically offer more features, depth and maturity, some experts said.

"Open source is a great alternative to jump-start a custom-built application, but it still is not as functionally rich as a packaged application," said Sheryl Kingstone, CRM program manager at Boston-based analyst firm Yankee Group. "When evaluating the total cost of ownership, be sure that you are fully comparing apples to apples, including future upgradeability and time to stay on top of competitive differentiating technology."

Sometimes, CRM open source solutions can take more time to get up-and-running. But businesses investing in an open source business solution do have access to a worldwide treasury of experts, many of whom are more than willing to freely share their wisdom and experience.

So, when researching your CRM software options, it may be wise to consider open source solutions. For many organizations this alternative has saved money and time - two valuable resources at any business.