In Open Source Software, "The ERP Market Also Rises" - Open Source Software Up the Stack

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November 09, 2007
In Open Source Software, "The ERP Market Also Rises"

I had an interesting conversation this week with Josep Mitja, the chief operating officer of a small but growing ERP company—Openbravo—of Pamplona, Spain. That’s right, Pamplona as in Hemingway and “The Sun Also Rises.” I am not sure if the founders of this open source software (OSS)-based company ever did the run through the city in front of the bulls that made Pamplona famous but they are definitely waving a big red cape in front of another bull, European ERP supplier SAP.

(To be honest, all I know about bull fighting is what I have seen in Hollywood movies and I really have no idea if a red cape is involved. We did enjoy Madrid, Segovia and Toledo on a long weekend many years ago however. Also, I got in trouble with animal-rights activists this week over on my Research 2.0 blog by making an analogy about dog fighting and now I am running the risk of being even more politically incorrect with every matador-related wordplay that comes to mind; so back to my point.)

Openbravo seems to be exhibiting a characteristic I am finding increasingly in successful OSS-based companies. For the ultimate success of the movement, OSS needs dozens if not hundreds of successful OSS application companies. In the OSS culture, these companies may be creating services as much as whole applications but the net result will be the same. The successful OSS application company I run into thinks about function first and OSS second (or even third depending on other tactics being used to execute against a business plan). I noted this first in a recent article chronicling an interview with John Newton of Alfresco. Openbravo meets that function-first criteria. That’s not to say it is not both taking from and giving back to the OSS community. Openbravo is very involved with its own forge of course, with the Open Solutions Alliance (Josep is on the board) as well as Apache and similar OSS foundations. But it understands that the OSS development model and licensing structure is a means to its end, not the end itself.

So why did SAP come to mind and not Compiere? Well there is the obvious ERP connection of course but it is also interesting that Openbravo is targeting the same small/medium enterprise (SME) market as SAP is with its new Business ByDesign (BBD) software announced in September as a service (SaaS) offering. Openbravo’s product features both a modern web-services-based design like BBD’s and Openbravo is also moving slowly towards SaaS just the way SAP is moving slowly (with full roll out of BBD not scheduled until 2008 or later). This gives Openbravo time to deliver to the SME market both the functionality and the delivery choices it wants. Openbravo already has a number of on-premise installations.

But like the good matador (sorry, I can’t help myself) I think Openbravo may have the footwork needed to more quickly react in the marketplace. That has always been the mark of the successful SME independent application software vendor from the glory days of J.D. Edwards (JDE) forward. Back in the day, JDE depended on the IBM System/38 and AS/400 to provide the infrastructure that let it be nimble. Today, OSS helps provide that quick-reaction ability to Openbravo (and all the other companies that want to get into the ring against the leading softwae suppliers). SAP and Oracle still want to build all the underlying tools themselves. Openbravo is not a shoe-string operation, having secured venture funding early in 2006 that allowed it to bring on Josep and other experienced management. It has also grown its headcount to over 60 from 9 in that time period.

I am not saying an Openbravo can knock SAP out (sorry, now I’m into prize fight analogies) but it’s good to see that as the JDE’s, Mapics, Ross’, ASK’s and similar companies become subjects for the Software History Museum, there are new players coming up to take their places. I will be doing a survey of OSS-based ERP products in December and I’ll tell you more about Openbravo after I finish that field work. But I give Josep and his company credit for spending more time thinking through the integrated data models and process engines needed for their chart of accounts and bill of materials processor and less time thinking about the OSS license wars and who said what about Microsoft.