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Openbravo Launches Open Source ERP For SMBs

The Spanish company is entering the U.S. market with Web-based software to help smaller companies make use of an enterprise resource planning system that reduces implementation time and provides long-term flexibility.
The open source model is critical for Openbravo. Juvara said ERP vendors these days can't differentiate their products on core features -- such as basic accounting, inventory management, or sales functions -- because those have become the market ante for any provider. Instead, it will be advanced features and add-ons will help set a vendor apart, Juvara said, and those are often best provided by third-party partners and developers rather than the mothership. There are currently 275 applications that can be plugged into the Openbravo system -- all downloaded and installed from within the UI. Three-quarters of the modules are open source; the rest are available as commercial add-ons.

"Open source allows us to create the ecosystem and to create a community around this platform that is then developing these capabilities that are available and ready to deploy," Juvara said.

Openbravo is focused on the SMB market, targeting companies with between $5 and $150 million in revenue and 20 to 500 employees. The segment is particularly well-suited for an open source, Web-based, and modular product that allows a company to start small with basic functionality and add features over time, he said.

"[SMBs] really cannot think of an ERP project that will last 18 months, because their competitive landscape changes more rapidly," Juvara said. "They need to change their business processes very rapidly."

In that sense, SMBs make a logical market for Openbravo and its agile ERP philosophy. A smaller firm using some combination of accounting software and spreadsheets, for example, might make the leap to ERP "one business process at a time," according to Juvara, rather than undertake a full-scale implementation. Openbravo's core open source product is called Community and is available free; the Professional edition includes additional modules and support for $650 per year, per user.

Founded in Spain, Openbravo is actively going after the U.S. market with its new release. "We decided that with this new version, the product was now mature enough to enter the U.S.," Juvara said. The CEO has relocated to San Francisco, and said the company has started a U.S.-based marketing organization to support commercial distribution. Juvara said the company has around 2,800 production deployments in the U.S. today.

Juvara said he rarely runs into resistance from SMBs when pitching the value of ERP, but that they almost always question whether they can afford it. Juvara acknowledged, though, that ERP has become something of a dirty word. He said Openbravo even had internal discussions about calling its software something else, but decided that ERP by any other name is still ERP.

"We decided we were too small to try and redefine the category, and so we have accepted the category with the name that it has, including the potential bad connotation," Juvara said. "We have embraced the term ERP."

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Joao-Pierre S. Ruth, Senior Writer