Open Source CRM - An Alternative to Hosted Models - Part 1.
Open source software (OSS) is defined as computer software for which the source code and certain other rights normally reserved for copyright holders are provided under a software license that meets the Open Source Definition or that is in the public domain. [1] This permits users to use, change, and improve the software, and to redistribute it in modified or unmodified forms. Many a time one does not have a clear understanding of what an Open Source Solution is, in relation to the Proprietary solutions available in the market today. One needs to understand that each of these have their own advantages and disadvantages in them.
Traditional CRM Packages have been relying primarily on 2 basic models of hosting applications i.e. On-Demand model and On-Premise models. Open Source products have come to the fore over the last couple of years with various vendors like Redhat, Apache, MySQL etc coming up with some extremely customer friendly products. This has resulted in open source taking an influential stand in the Enterprise Solutions domain with emphasis on the CRM vertical space. They have been able to challenge the Traditional CRM market by providing products that suit Enterprise Integration coupled with support offerings.
Primarily Traditional CRM Markets have been focusing on three segments - Large Scale Enterprises, SMBs and SaaS. Open Source Solutions have come to be recognized as a fourth segment in the CRM solution space. While the traditional CRM products have big players like Oracle, SAP who have been able to get a fair share of the market over the years, Open Source solutions like SugarCRM are still lagging behind to find a foot holds in the CRM space. It won't be long when Open Source solutions will have their share of the market as they tend to offer High level of flexibility that enables companies to easily adapt the technologies to provide easy usability.
This kind of approach suits the SMBs as this model is a counter to the high effort and cost involved with the proprietary solutions. Also, the SaaS model benefits from the Open Source CRM solutions as they are offered with free licenses which is in contrast to the software cost and subscription model of the commercial softwares. One other advantage with the Open source softwares is the ease with which they can be scaled to make them custom-developed to suit the needs of the customer.
One of the major hurdles that companies world-wide are facing today is in the area of integrating the aspect of transparency into the marketing and sales activities. The combination of open-source analytics and CRM application is essential in resolving the above mentioned hurdle. With the open-source market looking to evolve, open-source CRM opens up many new possibilities for addressing specific business issues in a cost-efficient manner, either as a standalone CRM solution or as building blocks in more-complex solutions that offers the required business agility to compete in an increasingly fast-paced and competitive market space.
In a recent analysis conducted by Independent research firm on behalf of a solutions-oriented IT services provider & consulting firm [2] and released in Dec 2008, titled "Open source paves the way for the next generation of enterprise IT"[3] where a great emphasis has been laid on the fact that open source delivers Cost and Quality benefits. The survey focused primarily on enterprises are already using open source, at least at a minimal level, which represent around 15 to 24 percent of enterprises in Europe and North America today. The survey brought out the impact of the open-source paradigm on enterprise IT by suggesting the current trends of open source adoption.
- Open source is moving up the technology stack.
- Industry sectors are adopting open source software (OSS) at different speeds and focuses.
- Open source is now strongly used to develop mission-critical apps, services, or products.
- OSS isn’t just cheap — it’s good and cheap.
- Cost is the primary adoption driver, but other factors are important, too: independence, flexibility, and innovation.
The future implications of the above are far-fetched in terms of the way the enterprise IT is handled and looks at a fundamental mind-change in the success adoption of open source if the next generation of enterprise IT is to be successful. Some of the emerging trends are:
- Open source components are ubiquitous.
- Customers will increasingly adopt OSS in the same professional way they have dealt with commercial software.The principles of open source like free sharing of source code or the way of forming communities of contributors & consumers are transferred to corporate best practices.A full new branch of service providers and competence centers inside established systems integrators will address commercial support for open source products.
Although the enterprises may dabble in open source for the cost savings, but they will stay, according to Independent research firm, for far more critical factors like:
As enterprises' adoption of open source software matures, they are likely to find more value beyond saving money on software license costs, low barriers to entry, and rapid evolution of successful open source projects.
The open source paradigm embraces an even more important long-term benefit--a more innovative IT shop that can rapidly adapt to changing technologies and seize new opportunities as higher-level open source infrastructure projects mature.
This combination of upfront cost savings and improved time-to-market will become a powerful weapon for those shops that can wield it strategically as a way to maximize the effectiveness of their software investments.
(To be continued......)
