Fri Nov 12, 3:23 PM ET
Add to My Yahoo! Business – NewsFactor
Erika Morphy, www.crm-daily.com
Commercial open source CRM providers have established their presence in the CRM market in relatively short order, with at least four companies — Sugar CRM, Ohioedge Anteil, Compiere — setting up shop over the last year.
Their sudden popularity is understandable. By building their own applications, users can customize a CRM application exactly as they would like, and at the same time they get to avoid the steep maintenance and fees associated with licensed software.
Sooner or later competing vendors — a group that includes hosted software providers and traditional on-premise software companies — will begin to feel the bite of the new competition. Gartner research analyst Wendy Close told CRM Daily, for example, that she believes the existence of open-source CRM vendors will keep the hosted CRM vendors’ subscription fees down over the next five years.
“Market awareness of open source CRM is definitely taking off, she tells NewsFactor.
Not Here Yet
But a recent client request has led Close to conclude that open-source CRM has a way to go before it will change buying patterns in the market.
She was approached recently by a large insurance company to analyze whether open-source CRM would be a viable replacement for its current campaign management/back-end accounting system.
The company had built its own direct-marketing application, which integrated the lead, campaign management and accounting system in one pipeline.
“The company knew their system was on its last legs and wanted to either band-aid it together with open source, or decide whether it should opt for a commercial software package,” Close says.
Making Headway
The closest contender was Compiere, she says, because it offered not only code for CRM but also e-commerce, accounting and the point of sale. But even that functionality did not touch what the company wanted to do, she says.
“The bottom line is that none of the open-source vendors would work for this particular client,” she says.
To be sure, open-source CRM is making headway in some enterprises. For example, a few tech companies — lured by the financial savings — have chosen to purchase open-source content management software, AMR Research Erik Keller tells NewsFactor.
Exception to the Rule
But Close believes such instances are more the exception than the rule, for now.
“I believe that next year we will be seeing more interest from end-users and more vendors announcing they have it,” she says. But actual deployments, she says, largely will be limited to companies that have downloaded the code to “play around with.”
By the end of 2006, though, “the market will see some real examples of companies that have made open-source CRM work for them.”
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