Michael Harvey, chief operating officer and managing director of consulting at Cora Technology (www.corratech.com), says:

Can open source technologies benefit the enterprise?

Yes. SMEs have never been able to afford Accenture and Oracle and nowadays they don’t have to. All of these best-of-breed open source applications share modern web architectures and fully public APIs (Application Program Interface) based on web services. Therefore integrating them is straightforward. SMEs are unlikely to actually look at the source code that is always provided under open source licenses. That said, its availability provides peace of mind (it’s equivalent to a code escrow). More important, however, it makes the job of system integrators like CorraTech easier. If a new module or integration is required, we are able to accomplish it with less time and expense. A significant part of CorraTech’s business these days is replacing incumbent systems with open source applications, all the way from legacy client server applications (e.g., OpenERP replacing PeachTree) to Oracle Enterprise components (e.g., Magento for iStore).

If there is a bump in road, it is in continuing to educate the business people and owners about the benefits of open source. We are finding this ever easier to do, and more often than not, are approached by clients who have already made a decision to go with open source. Indeed, because of the way open source distribution works, most have already downloaded and tried out the product(s) in which they are interested. This vastly decreases the sales cycle. For some, the poor economy and cost pressure is a motivating force. Nevertheless, for most of our clients, the decision to go with open source hinges on the value and benefits of the software itself.

What areas offer the most potential?

For most organizations, it is now a given that they must have a robust web presence, often involving eCommerce in some form or fashion. (B2C and B2B organizations.) As discussed above, given the existence of open source applications that handle every step of the value chain, there is a tremendous opportunity for SMEs to put the systems and processes in place to derive more and more value from their business models. We talk to our customers about the complete value chain as follows: marketing to generate new and cultivate existing business (incl. social media/collaboration as desired); sales via all relevant channels: instore, online, phone, fax, catalog; internal management tools for staff to collaborate amongst themselves and with customers; order to cash including finance and accounting, inventory, and warehouse management; and analytics of the entire chain… Everyone of these can be facilitated by open source products. It is amazing how many of our clients are still using spreadsheets and legacy applications. For them, the benefits of installing open source applications that can be tied together are substantial.

What’s interesting about this front of house to back of house coverage is that a client can enter the chain at any point, depending on their most urgent pain point. For example, a business losing market share to an online competitor may need to overhaul its first generation web store into a sophisticated eCommerce system. They may quickly find, however, that they need to upgrade their shipping operation. Likewise, a client may identify sales force automation as their priority, necessitating a real CRM system, but then realize that they need to coordinate multi-channel sales via an integrated eCommerce and POS system.

Another substantial benefit to SMEs of open source software is the rapid innovation in the available products. Magento, the red hot eCommerce platform launched in mid-2007 and has already been downloaded over a million times and boasts a user/developer community of 150,000 individuals. This community has created nearly 2,000 extensions to date. Many are available free and others come with a price reflecting their value. Most Magento deals we undertake today incorporate at least half-a-dozen of these extensions. The situation is similar with Acquia (Drupal), SugarCRM, OpenERP, and other leading applications. These marketing dynamics have not gone unnoticed by the investing community—the companies behind these applications are well-capitalized at high valuations. They—and their supportive communities—are here to stay.

Any potential concerns?

Yes: Who will support the application? Should I expect “strange” licensing provisions? Will I have to pay?

These are concerns expressed by SME stakeholders, but do not actually represent “real” concerns in the modern software world. Regarding support, firms like CorraTech provide frontline support to all of our customers. Conversely/additionally, support can be had directly from the vendor who developed the software. As noted above, these are real companies in every sense of the word. Regarding licensing, most going concerns find that they do not want to use the free “community” versions of the software, even though it is robust and of high quality. Thus, they opt for a commercial license similar to any other commercial license. These licenses come with warranties and also come with the source code. There tend to be additional high value features over and above what is in the community version. And, as noted immediately above, they have access to first rate support rather than having to rely on community forums for answers.