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Alison Diana Is Open Source CRM Ready to Compete?
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By Alison Diana

Open Source is Growing But Continues to Fall in the CRM Market Shadows

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 eliminate 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 professionals have deployed 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.

In April, SugarCRM unveiled Sugar 6, the latest version of its flagship open source CRM software. With on-demand and on-site versions available for both enterprises and small and midsize businesses, SugarCRM's software encompasses sales, marketing and customer service. The company has about 6,000 customers, and a network of global partners that develop applications for its business software.

"SugarCRM is the "ne plus ultra" of open source CRM. In my opinion, it stands head and shoulders above all the other open source CRM vendors," said Paul Greenberg, author of the best-selling "CRM at the Speed of Light" and president of The 56 Group, LLC, 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.

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, open source CRM solutions can take more time to get up-and-running, some experts said. 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. End

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Comments (3) — Comments for this page are closed —

Guest Dave Anbros
  We considered open source crm along with commercial crm during our software selection project about a year ago. While we liked key facets of open source, we found it near impossible to engage deep enough with an open source vendor (except for Sugar) to complete our purchase process. We ended up buying RightNow.
  Denise Denise Holland
    The former CEO of SugarCRM had a saying that software is not sold, it's bought — suggesting that buyers will seek out vendors when they have a purchasing need. While that statement may be arguably more true with platform and technology products procured directly by IT staff, it's not been proven true with business applications where the purchase decision is (or at least should be) driven by a business leader. In the world of business systems, software is sold, not bought. This fact is reinforced by the generally accepted notion that the most successful software companies don't necessarily have the best products, but do have outstanding sales and marketing functions. Many open source CRM software vendors have impressive products, but are woefully poor in their sales and marketing capabilities, which contribute to their lack of customer acquisitions and the experience you incurred.

Guest Ralph Gening
  That's exactly why open source crm products have failed to keep pace with the growth of proprietary crm systems, and especially cloud systems.


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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. 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."

Sheryl Kingstone, CRM Analyst, Yankee Group


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