Are enterprise customers ready to consider open-source ERP tools? Maybe not -- but it's a very different story in the small-business market.ERP represents the final frontier for open-source software: Open-source vendors have cracked -- and often transformed -- almost every other category of business software except for this one. And the notion that open-source ERP can gain traction in the enterprise market is still the subject of a hot debate.

CNET's Matt Asay, for example, recently declared 2009 the "year for open-source ERP," with the enterprise market finally opening up to open-source ERP vendors. Infoworld.com blogger Savio Rodrigues, on the other hand, has his doubts whether large companies that take years and spend millions to roll out ERP projects -- and that engage in extremely risk-averse behavior -- will dump Oracle or SAP to take the open-source plunge.

That doesn't mean Rodrigues is ready to dismiss open-source ERP. In fact, both he and Asay, along with quite a few other IT industry-watchers, agree that open-source ERP vendors like Orange HRM, Openbravo, and Compiere have a very bright future working with smaller companies that can't or won't pay for traditional, proprietary big-ticket ERP solutions.

"Companies that have 50 to 2,000 employees often need more than QuickBooks, Microsoft Excel, and roll-your-own apps," Rodrigues writes. "This is where Openbravo and Compiere have roles to play."

Proprietary ERP vendors certainly aren't ignoring the SMB market. As a recent Oracle-AMD sponsored white paper demonstrates, they understand that smaller companies represent a major ERP business opportunity. But with open-source alternatives already targeting smaller firms, companies like Oracle, SAP, and Peoplesoft are no longer free to dictate their own terms of engagement for the SMB market.

This is all great news for anyone considering ERP tools for a small or medium-sized business. Just as open-source alternatives have forced vendors selling everything from CRM software to PBX systems to adopt a more flexible and open approach, open-source vendors are likely to play a major role making ERP both affordable and practical for the small-business market.