In open source, "it takes a backwash man to sing a backwashed song." - Open Source Software Up the Stack

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February 21, 2008
In open source, "it takes a backwash man to sing a backwashed song."

I spoke with Mike Bates, CEO of HotWax Media, this week, following up on research I did recently on his IT-service-provider company and the entire open source ERP market. A summary of the research appears in a recent ebizQ article (off to the left of my head on the main Open Source page, depending on when you read this) titled “Can OSS ERP Projects Meet User Demand?”

The article asks the question: Are there any “market seams” that ERP open source software (OSS) can exploit? The issue is that all of the OSS ERP projects we researched are going to end up competing for IT budgets coveted not just by other OSS product and service providers but by Microsoft Business Division, Oracle, and SAP as well.

That is not as foolhardy an objective as it sounds. Mike Bates explained that he and his partners at HotWax are looking at local government and other industry-specific sectors underserved by the big-name ERP providers. HotWax already provides ERP services for a slew of the Internet-commerce companies on which it originally built its 10-year-old business. HotWax Media might not think of it this way but my research methodology says HotWax is already a leader in a major growing subsegment of the retail automation market, Internet Commerce, a sector underserved by everyone else (but Microsoft).

That’s what I call a “seam.” There are thousands of such seams to be found by slicing the market (as Microsoft, Oracle and SAP do) by industry, size of company targeted, number of employees in the company targeted, geography, and so forth.

Although HotWax started out building and maintaining web sites for users, it has morphed into an ERP services supplier via a major involvement in the Apache OfBIZ ERP project. HotWax counts both OFBiz project creators David Jones and Andrew Zeneski on its executive team, and also leads teams comprised of many of the OFBiz developers. It maintains no forge of its own but works totally through the Apache Software Foundation (see this recent report from Apache for more information).

By the way, showing my age, I had to have Mike explain that HotWax was a popular song when he was forming his company 10 years ago (by the group Beck). I looked at the lyrics and I am going to have take his word for it. They are no more cryptic than the classic line "I took my Chevy to the levee but the levee was dry," part of the refrain from the ode that honors "the day the music died."