New Open Source Tools Pay Big Returns


Big experiments with open source are delivering impressive ROI. But adoption rates are still low. What'll it take for them to go up? A few years back, a bunch of vendors and groups started springing up with brand-new ideas for how to use open source. They were talking things like ERP, CRM and security, not the old desktop stuff. I, for one, was skeptical.

I doubted that any of these startups could upend any of the entrenched, behemoth firms already dominating those areas. I also doubted that many IT managers would take their experiments with open source into the truly mission critical areas of their operations.

Turns out I was right...and a little wrong.

Computer Economics has some new numbers on just how well those new-ish ventures are doing. According to their survey of 200 IT departments, 65 percent of early adopters in open-source business apps saw a positive ROI within two years. Another 30 percent broke even. A meager five percent saw negative returns. Pretty solid for what I suppose we should still call emerging technologies.

But there's always a downside. First, Computer Economics says many IT orgs underestimate the total cost of ownership for these apps. Second, the actual number of businesses adopting these technologies is still pretty low.

So it goes with emerging technologies. Early adopters face plenty of challenges, as we've noted many times before. But there's also a huge upside for those who get in early. Balancing that risk-versus-reward scenario is an ongoing challenge for IT leaders.

But there are plenty of interesting things happening with these open-source experiments, as Bob Violino reported recently.

Only time will tell if those adoption rates go up. What do you think, IT pros? Is your company looking into open-source options for ERP, CRM or other big-deal systems? What are the pros and cons you're weighing?


2 Comments for "New Open Source Tools Pay Big Returns"

  • Bernie Gleason September 27, 2008 7:42 am

    From my experience in the higher education sector, where open source ERP-level applications are making some traction, there are two things important issues that contribute to the calculations of ROI and risk. 1. Community -- how established and how strong is the enterprise's (institution and/or company), not just developer's, commitment of intellectual, HR and financial resources? 2. Support -- are there third-party support and service organizations (for pay) that are contributing members of the OS community?

  • DB September 26, 2008 4:23 pm

    My organization is embarking on a huge big-deal enterprise-level system dealing with medical billing, medical treatment and legal data. All are subject to change in structure, content and with wildly differing user comfort w/ technology. Open source would definitely be flexible and scalable enough to be the hands-down preferred choice in terms of TCO. HOWEVER there are issues: 1. Management has aggressively hired H1Bs who tend to be a bit averse to flexibility and innovation (i.e., they warm up to innovation like a cricket warms up to a scorpion). Open source, by nature is, well, open. Flexibility and innovation are kinda needed when working w/ open source projects. 2. Due to aggressively seeking H1Bs and outsourcing, no training time or funding is being provided to IT staff to maintain/ acquire level of skills needed to use Open Source dev. tools. Non H1Bs are Result: COTS and only COTS. Waterfall development. Rigid system that is/will be difficult to maintain, and nearly impossible to enhance/expand to handle the inevitable changes that will occur due to the nature of the biz model(Legal decisions and medical treatment: no likelihood of change right? Yeah.. right).

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