openerp-logo-2011.jpg With a competitive business model, a vibrant developer community and 35 active partners around the globe, OpenERP may be the most impressive open source software company you have never heard of.

What Is It?

OpenERP is a commercial open source (think Alfresco or Redhat) suite of business applications including:

  • CRM
  • Purchasing
  • Manufacturing
  • Warehouse Management
  • Project Management
  • Accounting
  • Human Resources
  • Marketing

OpenERP Web Client Dashboard

Does it remind you of SAP or Peoplesoft? Imagine if you could download a similar ERP platform and install it on your own hardware for free. If you can't imagine you or your IT group managing an ERP suite in-house, imagine if you could use a cloud-based version of the same ERP suite for US$ 49 per month, per user.

Now I have your attention.

The Business Model

OpenERP accepts the fact that you are going to have to customize the software to meet your needs. Because of this, OpenERP believes that you shouldn't have to pay licensing fees for software that has to be customized anyway.

Therefore, OpenERP provides the baseline platform for free and encourages you to use the money saved on licenses for enhancements and customizations provided by OpenERP's professional services group and partner network.

This is a standard model in the commercial open source software landscape. Along with maintenance -- the bug fixes that come as part your "subscription" -- and services, OpenERP adds another revenue stream with the aforementioned cloud-based version of the platform.

Your company may have a gigantic IT department, but not every company does -- especially the mid-size companies that OpenERP is targeting. A year in the cloud could save enough money for these mid-size companies to make the leap and build the IT department necessary for sustained growth.

The Differentiator

To this point, OpenERP has followed the blueprint for building a successful open source software company. Moving forward, OpenERP deviates from that plan with a strategy intended to differentiate its value proposition from the other companies in the market.

OpenERP has launched what it is calling an Apps Library. This is not yet another app store. These are extensions or add-ons to the core OpenERP platform -- they are open source and they are free.

We are not talking about a handful of apps here either. The library currently contains over 1000 apps with approximately 30 new apps being added to the library by the OpenERP community every month.

The purpose of the Apps Library and making it available to the public is to help users of the platform find and install specific features before having to build them themselves. OpenERP recognizes that organizations often have common functionality gaps. When a partner fills one of those gaps, the Apps Library makes it available to everyone.

Imagine if the big commercial players in ERP made all their customizations available to all customers. I can't imagine it either.