Bending the back office: Open source CRM and ERP

The back office for any company requires many different layers of software. Essentials like e-mail and a basic Web site are relatively simple commodities to run. The hardest job is delivering the kind of software that acts as the spinal cord for the business, that cares for all of the most essential details, big and small, that keep the customers paying the invoices and ensure the bank accounts hold enough money to make the payroll.

These systems go by names like customer relationship management (CRM) and enterprise resource planning (ERP), but they're really just a carefully crafted collection of database tables with a set of routines that keep the employees from messing up the information. They are usually so essential to a business that the database administrators can puff up their chests and make credible statements like, "Our company is really just a big database with a sales force and a warehouse that do its bidding." They're not far from the truth.

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Over the last decade, a number of open source solutions appeared that make it simpler for a company to digitize all of its operations by just downloading some code, firing up the compiler, and hooking up a database. These open source competitors began as very low-cost competitors to the giant enterprise packages from the likes of Oracle, SAP, and others.

Loss leaders
The space is now much more mature than a few programmers trading code. Companies like Openbravo, SugarCRM, and Compiere are billing themselves as professional open source companies that deliver at least two grades of products: a community edition and a professional one with support and often additional features. They are also starting to offer SaaS editions, hosting the entire stack for you in what may or may not be a "cloud" of servers.

These choices offer a fascinating glimpse of how open source development is adapting to commercialization, at least when it involves projects that are mirrored in some way by proprietary tools. You can pay nothing and enjoy many of the features of the open source version or you can become a paying client and receive better features and more hand-holding.

This isn't an easy decision because the companies have become very adept at figuring out what the world needs and what it is willing to pay for. After all, if they can't figure this out, they'll go out of business and set the open source version adrift. And such a market failure wouldn't be as catastrophic as it can be with a proprietary company because the open source code is still out there and you're still welcome to maintain it with your own budget. The companies like to brag that they don't lock you in.

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