Semi–open Source Vendor Discusses Market Trends
TEC's continuing question and answer (Q&A) series, in which we solicit vendors' responses to our questions and observations on market trends (see previous articles in this series: Two Stalwart Vendors Discuss Market Trends and A Partner-friendly Platform Provider Discusses Market Trends), has become quite popular with readers and vendors alike.
Another market player that has voiced its opinions is Norfolk, Virginia, (US)-based xTuple (formerly OpenMFG). Privately held xTuple is a self-financed developer of enterprise-class business process applications powered by open source software and infrastructure such as Linux operating system (OS), PostgreSQL database, and Qt, a C++ graphical user interface (GUI) development framework from Trolltech, a Norwegian software company.
Before delving into xTuple's answers to our questions, some background on xTuple and OpenMFG is in order. The vendor is a relative newcomer in the enterprise resource planning (ERP) arena; it was founded in 2002 (as OpenMFG) by its current president and chief executive officer (CEO) Ned Lilly, a former executive at Landmark Communications.
The first we learned of OpenMFG was at an industry event in early 2003, where the company had a booth and was able to brag about only a few pilot ("beta," or test) customers. Our impression at that time, given the depressed economy worldwide and the demise of so many vendors, was that a brand new ERP provider was not badly needed in the market. However, xTuple has, to a degree, proved us wrong: its current roster of xTuple ERP commercial customers to date is about 100, and it has 20 partner resellers. The company's focus on the smaller enterprises, with up to $100 million (USD) in revenues, must have played a great part in its current success. The free version of xTuple ERP has also been downloaded over 150,000 times from SourceForge.net, the world's largest development and download repository of open source code and applications.
Expanding Product Offerings
Though it might not sound like marketing wizardry to some, the xTuple name was picked to denote the company's diversification in terms of product offering: OpenMFG, a manufacturing-oriented ERP product; OpenRPT, an open source report writer; and the most recent PostBooks open source accounting/ERP application. The name xTuple, therefore, speaks to the exponential growth possible with open source solutions.
The vendor continues to develop and market the xTuple ERP OpenMFG Edition, its commercially licensed solution for small to midsized manufacturers. The maturing manufacturing-focused ERP product will continue to be available under the hybrid community source code license that the company has employed for the past six years. In this arrangement, partners and customers get full source code, and any subsequent enhancements flow into the base product to which xTuple maintains and claims the intellectual property rights.
Having been referred to on occasion as a quasi–open source provider, xTuple points out it has never claimed that the OpenMFG Edition is fully open source (the vendor knows enough about that "clique-y" and somewhat snobbish world to be very careful with its choice of words and definitions). Yet the company believes that the hybrid approach has offered the best of both worlds to its users for the past five years in terms of a solid, professionally supported ERP solution built on a fully open source infrastructure, and licensed under a community source license through which community members can be actively involved in the product's ongoing development.
What's new is the PostBooks product: the company has carved off a new, entry-level, fully open source product that shares the same code base as the commercially licensed Editions. In fact, the client binaries are identical for both products, so an upgrade from PostBooks to the Standard or OpenMFG Editions involves running a simple database script. The only difference is that OpenMFG offers more advanced functionality in manufacturing and distribution, which non-manufacturing enterprises probably do not need. For more details about the commercially licensed xTuple ERP Standard Edition product (targeted at distributors and retail), and the free PostBooks Edition and the OpenMFG Edition, see http://www.xtuple.com/comparison for a chart of all three products.
To be more precise, OpenMFG-specific features cover approximately 20 percent of the highest-value functionality, such as multi-warehouse inventory, warehouse transfer orders, lot/serial control, manufacturing resource planning (MRP), master production schedule (MPS), bills of operations (BOOs)/routings, breeder bills of material (BOMs), item transformations, infinite capacity planning, lean/buffer management, returns/service, and batch manager/electronic data interchange (EDI).
PostBooks is available now as free and open source software (FOSS) on SourceForge.net, and elsewhere under common public attribution license (CPAL) open source license. Based on over 150,000 downloads to date, and the active community of users and developers at SourceForge.net and xTuple's own xtuple.org website, xTuple thinks the offering will be a big hit. Thus, the two communities will grow in tandem, while xTuple pledges to manage the ongoing development of both products, so that enhancements to one can flow into the other. As mentioned above, it is the same code base, after all; should a PostBooks user enterprise ever wish to upgrade to OpenMFG, it only has to run a short upgrade script on its database. Since the business logic for both applications resides in the PostgreSQL back end (in the procedural language), this is relatively easy to maintain.
PostBooks, xTuple believes, is one of the most advanced open source accounting/ERP solutions out there in the market. The recent 3.0 version of xTuple ERP featured what xTuple billed as "the world's only open source ERP product configurator" as part of the base PostBooks package. Of course, the OpenMFG and Standard Editions will also continue to feature added advanced functionality that will make it "worth the upgrade" from the free "sibling" (related) product, especially for small manufacturers that cannot afford the money and time requirements of traditional ERP deployments. As a company, xTuple pledges to support the entire technology stack its applications employ, notably the PostgreSQL database.
Appealing Pricing Transparency
Where xTuple is indisputably "open" (referring back to the question of OpenMFG's true open source nature) is in the vendor's transparency about its pricing and current product functionalities. For one, product pricing is available online. Despite new product additions, OpenMFG pricing remains unchanged, and the application continues to be offered as either 1) a subscription-style license (which includes software maintenance) at $1,000 (USD) per user, per year; or 2) a perpetual license at $3,000 (USD), plus 18 percent annual maintenance (for a minimum of five users). The pickup among the current customer base is roughly 50-50.
While PostBooks is free software, xTuple offers some commercial support options, such as an annual retainer at roughly half the cost of OpenMFG annual license and incident-based bundles of consulting hours. Following are some of the vendor's selected productized professional service offerings:
*
the QuickStart implementation package (10 days and a project plan)
*
three grades of networked server maintenance: basic, backup, and premium
*
PostgreSQL database support, tuning, replication—a number of tiered offerings with details available on the company site
Last but not least, there are some xTuple ERP server appliances, such as three configuration options based on the user count and level of support.
No-spin Product Functionality
As for the product's available out-of-the-box functionality, it is also a "what-you-see-is-what-you-get" approach. There are a dozen or so xTuple ERP modules with functionalities that flow in a cohesive and logical manner. Prospective users can "test drive" xTuple ERP functionality at http://www.xtuple.com/demo/video.
The company's employees are seasoned ERP executives, sales, or presales personnel from former or current competitors of xTuple. This has played a major role in designing xTuple's capabilities from scratch, as it was essential to provide only the necessary, nifty product capabilities first. It was also necessary to stay away from the "functional bloat" (extraneous functionality; see A New Platform to Battle Software Bloat?) which all too often becomes overkill for smaller enterprises.
To that end, currently available xTuple ERP functionality revolves around the following modules, capabilities, or processes:
*
Inventory management—enabling multi-warehouse and multilocation functionality, cycle counting, lot and serial tracking, and traceability, etc.
*
Product definition—enabling BOMs, routings, standard costing, actual costing, etc.
*
Manufacturing—enabling MRP, MPS, capacity requirements planning (CRP), shop floor control (SFC), labor entry, material variances, etc.
*
Purchasing and accounts payable (A/P)—enabling segmented requisitions and purchase orders, accounting controls, vendor performance reports, etc.
*
Sales, customer relationship management (CRM) and accounts receivable (A/R)—enabling 360-degree customer views, sales quotes, multidimensional pricing schedules, sales contacts, incidents, to-do lists, opportunities, etc.
*
Shipping and receiving—integrated with UPS, FedEx, and other leading shippers, and fully bar code–enabled
*
General ledger (G/L)—enabling detailed G/L and journals, bank reconciliation, budgeting, customizable report engine, etc.
*
Many system-wide utilities—fine-grained user privileges and security, batch manager, events engine, hotkeys, calendars, EDI, international locales and complex tax structures, multicurrency, project management, etc.
Community-led Product Development
Certainly, one wonders how a company of only about 15 employees could have developed so much functionality from the ground up. Well, if one counts the help from the entire development community (including customers and resellers), the answer to this becomes clear. For instance, the current xTuple director of product development, John Rogelstad, is an experienced ERP expert and consultant who implemented OpenMFG as a customer during his prior employment at Marena Group, and who has written major new areas of functionality.
One of these new functionalities is the recently released constraint management capability. This new functionality follows along the lines of the Theory of Constraints (TOC) and simplified Drum-Buffer-Rope (S-DBR) concepts (see The Theory of Constraints Enters the Lean Manufacturing Arena). The developed code was footnoted with references to the "fathers of TOC," Goldratt and Schragenheim. The solution looks deceptively simple, but many people actually take a while to "get" it (learn and understand) because it appears to be counterintuitive at first. Basically, the target customer for this solution is someone who has pulled out half his or her hair trying to program the shop with a complex finite scheduler, only to find that the system recommendations conflict with reality.
SOURCE:
http://www.technologyevaluation.com/research/articles/a-semi-open-source-vendor-discusses-market-trends-19391/
TEC's continuing question and answer (Q&A) series, in which we solicit vendors' responses to our questions and observations on market trends (see previous articles in this series: Two Stalwart Vendors Discuss Market Trends and A Partner-friendly Platform Provider Discusses Market Trends), has become quite popular with readers and vendors alike.
Another market player that has voiced its opinions is Norfolk, Virginia, (US)-based xTuple (formerly OpenMFG). Privately held xTuple is a self-financed developer of enterprise-class business process applications powered by open source software and infrastructure such as Linux operating system (OS), PostgreSQL database, and Qt, a C++ graphical user interface (GUI) development framework from Trolltech, a Norwegian software company.
Before delving into xTuple's answers to our questions, some background on xTuple and OpenMFG is in order. The vendor is a relative newcomer in the enterprise resource planning (ERP) arena; it was founded in 2002 (as OpenMFG) by its current president and chief executive officer (CEO) Ned Lilly, a former executive at Landmark Communications.
The first we learned of OpenMFG was at an industry event in early 2003, where the company had a booth and was able to brag about only a few pilot ("beta," or test) customers. Our impression at that time, given the depressed economy worldwide and the demise of so many vendors, was that a brand new ERP provider was not badly needed in the market. However, xTuple has, to a degree, proved us wrong: its current roster of xTuple ERP commercial customers to date is about 100, and it has 20 partner resellers. The company's focus on the smaller enterprises, with up to $100 million (USD) in revenues, must have played a great part in its current success. The free version of xTuple ERP has also been downloaded over 150,000 times from SourceForge.net, the world's largest development and download repository of open source code and applications.
Expanding Product Offerings
Though it might not sound like marketing wizardry to some, the xTuple name was picked to denote the company's diversification in terms of product offering: OpenMFG, a manufacturing-oriented ERP product; OpenRPT, an open source report writer; and the most recent PostBooks open source accounting/ERP application. The name xTuple, therefore, speaks to the exponential growth possible with open source solutions.
The vendor continues to develop and market the xTuple ERP OpenMFG Edition, its commercially licensed solution for small to midsized manufacturers. The maturing manufacturing-focused ERP product will continue to be available under the hybrid community source code license that the company has employed for the past six years. In this arrangement, partners and customers get full source code, and any subsequent enhancements flow into the base product to which xTuple maintains and claims the intellectual property rights.
Having been referred to on occasion as a quasi–open source provider, xTuple points out it has never claimed that the OpenMFG Edition is fully open source (the vendor knows enough about that "clique-y" and somewhat snobbish world to be very careful with its choice of words and definitions). Yet the company believes that the hybrid approach has offered the best of both worlds to its users for the past five years in terms of a solid, professionally supported ERP solution built on a fully open source infrastructure, and licensed under a community source license through which community members can be actively involved in the product's ongoing development.
What's new is the PostBooks product: the company has carved off a new, entry-level, fully open source product that shares the same code base as the commercially licensed Editions. In fact, the client binaries are identical for both products, so an upgrade from PostBooks to the Standard or OpenMFG Editions involves running a simple database script. The only difference is that OpenMFG offers more advanced functionality in manufacturing and distribution, which non-manufacturing enterprises probably do not need. For more details about the commercially licensed xTuple ERP Standard Edition product (targeted at distributors and retail), and the free PostBooks Edition and the OpenMFG Edition, see http://www.xtuple.com/comparison for a chart of all three products.
To be more precise, OpenMFG-specific features cover approximately 20 percent of the highest-value functionality, such as multi-warehouse inventory, warehouse transfer orders, lot/serial control, manufacturing resource planning (MRP), master production schedule (MPS), bills of operations (BOOs)/routings, breeder bills of material (BOMs), item transformations, infinite capacity planning, lean/buffer management, returns/service, and batch manager/electronic data interchange (EDI).
PostBooks is available now as free and open source software (FOSS) on SourceForge.net, and elsewhere under common public attribution license (CPAL) open source license. Based on over 150,000 downloads to date, and the active community of users and developers at SourceForge.net and xTuple's own xtuple.org website, xTuple thinks the offering will be a big hit. Thus, the two communities will grow in tandem, while xTuple pledges to manage the ongoing development of both products, so that enhancements to one can flow into the other. As mentioned above, it is the same code base, after all; should a PostBooks user enterprise ever wish to upgrade to OpenMFG, it only has to run a short upgrade script on its database. Since the business logic for both applications resides in the PostgreSQL back end (in the procedural language), this is relatively easy to maintain.
PostBooks, xTuple believes, is one of the most advanced open source accounting/ERP solutions out there in the market. The recent 3.0 version of xTuple ERP featured what xTuple billed as "the world's only open source ERP product configurator" as part of the base PostBooks package. Of course, the OpenMFG and Standard Editions will also continue to feature added advanced functionality that will make it "worth the upgrade" from the free "sibling" (related) product, especially for small manufacturers that cannot afford the money and time requirements of traditional ERP deployments. As a company, xTuple pledges to support the entire technology stack its applications employ, notably the PostgreSQL database.
Appealing Pricing Transparency
Where xTuple is indisputably "open" (referring back to the question of OpenMFG's true open source nature) is in the vendor's transparency about its pricing and current product functionalities. For one, product pricing is available online. Despite new product additions, OpenMFG pricing remains unchanged, and the application continues to be offered as either 1) a subscription-style license (which includes software maintenance) at $1,000 (USD) per user, per year; or 2) a perpetual license at $3,000 (USD), plus 18 percent annual maintenance (for a minimum of five users). The pickup among the current customer base is roughly 50-50.
While PostBooks is free software, xTuple offers some commercial support options, such as an annual retainer at roughly half the cost of OpenMFG annual license and incident-based bundles of consulting hours. Following are some of the vendor's selected productized professional service offerings:
*
the QuickStart implementation package (10 days and a project plan)
*
three grades of networked server maintenance: basic, backup, and premium
*
PostgreSQL database support, tuning, replication—a number of tiered offerings with details available on the company site
Last but not least, there are some xTuple ERP server appliances, such as three configuration options based on the user count and level of support.
No-spin Product Functionality
As for the product's available out-of-the-box functionality, it is also a "what-you-see-is-what-you-get" approach. There are a dozen or so xTuple ERP modules with functionalities that flow in a cohesive and logical manner. Prospective users can "test drive" xTuple ERP functionality at http://www.xtuple.com/demo/video.
The company's employees are seasoned ERP executives, sales, or presales personnel from former or current competitors of xTuple. This has played a major role in designing xTuple's capabilities from scratch, as it was essential to provide only the necessary, nifty product capabilities first. It was also necessary to stay away from the "functional bloat" (extraneous functionality; see A New Platform to Battle Software Bloat?) which all too often becomes overkill for smaller enterprises.
To that end, currently available xTuple ERP functionality revolves around the following modules, capabilities, or processes:
*
Inventory management—enabling multi-warehouse and multilocation functionality, cycle counting, lot and serial tracking, and traceability, etc.
*
Product definition—enabling BOMs, routings, standard costing, actual costing, etc.
*
Manufacturing—enabling MRP, MPS, capacity requirements planning (CRP), shop floor control (SFC), labor entry, material variances, etc.
*
Purchasing and accounts payable (A/P)—enabling segmented requisitions and purchase orders, accounting controls, vendor performance reports, etc.
*
Sales, customer relationship management (CRM) and accounts receivable (A/R)—enabling 360-degree customer views, sales quotes, multidimensional pricing schedules, sales contacts, incidents, to-do lists, opportunities, etc.
*
Shipping and receiving—integrated with UPS, FedEx, and other leading shippers, and fully bar code–enabled
*
General ledger (G/L)—enabling detailed G/L and journals, bank reconciliation, budgeting, customizable report engine, etc.
*
Many system-wide utilities—fine-grained user privileges and security, batch manager, events engine, hotkeys, calendars, EDI, international locales and complex tax structures, multicurrency, project management, etc.
Community-led Product Development
Certainly, one wonders how a company of only about 15 employees could have developed so much functionality from the ground up. Well, if one counts the help from the entire development community (including customers and resellers), the answer to this becomes clear. For instance, the current xTuple director of product development, John Rogelstad, is an experienced ERP expert and consultant who implemented OpenMFG as a customer during his prior employment at Marena Group, and who has written major new areas of functionality.
One of these new functionalities is the recently released constraint management capability. This new functionality follows along the lines of the Theory of Constraints (TOC) and simplified Drum-Buffer-Rope (S-DBR) concepts (see The Theory of Constraints Enters the Lean Manufacturing Arena). The developed code was footnoted with references to the "fathers of TOC," Goldratt and Schragenheim. The solution looks deceptively simple, but many people actually take a while to "get" it (learn and understand) because it appears to be counterintuitive at first. Basically, the target customer for this solution is someone who has pulled out half his or her hair trying to program the shop with a complex finite scheduler, only to find that the system recommendations conflict with reality.
SOURCE:
http://www.technologyevaluation.com/research/articles/a-semi-open-source-vendor-discusses-market-trends-19391/
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