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 these systems offer advantages in lowering acquisition costs and offering source code flexibility, market growth has yet to take off. The barrier preventing its rise sometimes stems from 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 applications are not going to be put into similar situations, so open source is at a disadvantage provided by its own flexibility," he added.
Kolsky noted that the SugarCRM 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 systems 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 non-proprietary CRM software is on the front-end; the potential budget-buster typically comes later. Initial licensing may be 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."
Extensibility is a Benefit, not a Solution
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 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 still 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."
Openly sourced CRM applications are also beginning to lose some of their unique advantages to proprietary systems.
"CRM companies like Salesforce have created their own languages (Apex, Force.com, Lightning) 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.
The Future Looks Bright
Other analysts are more bullish. According to Chris Nichols of Vantive, "Open source CRM and other business applications will indeed disrupt the existing (commercial, closed-source) business applications software industry."
He and others suggest 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 world. 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 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.