Software Supplement Part 3: Open source CRM still facing security concerns

16th Jun 2009

co-founder

diginomica

Every CIO knows that you don't get something for nothing, but open source software is as close as it gets. Stuart Lauchlan looks at why open source CRM is one of the most active inroads into the enterprise and why it still has a long way to go to as far as security is concerned.

Open source software is software for which the source code and certain other rights normally reserved for copyright holders are provided under a software licence that meets the Open Source Definition or that is in the public domain. It has been making some inroads in the enterprise and open source CRM is one of the most active fronts in this campaign. That said, market share for open source CRM offerings remain - below 1% through 2008 - according to Gartner. Cost is the primary adoption driver but other factors include vendor independence, flexibility and innovation.

A study by CIO.com last year found that 45% of respondents said they are using desktop applications such as OpenOffice.org, while 29% use open-source enterprise applications. The most popular of those enterprise applications are collaboration tools, customer relationship management (CRM) tools and ERP applications. Some 58% strongly agreed or agreed with the idea that Linux is reliable enough to depend upon for mission-critical applications.

There are commercially available packaged offerings, such as SugarCRM, which companies can sign up for directly, while there are also indirect ways for open source to gain a foothold in the enterprise. “You’re probably using open source whether you know it or not,” said SugarCRM’s Martin Schneider. “Almost all SaaS CRM uses at least some open source.”

But CIOs still have concerns about open source, most notably in the area of security. According to new data from Forrester Research, 58% of large companies surveyed said they had security concerns about open source, while the figure for small and mid-sized businesses was slightly higher, at about two-thirds.

Overall open source CRM remains promising, but with that promise yet to be realised on a mass adoption scale. "Open source enterprise application vendors are currently changing gears from start-up mode to market expansion mode,” says Bo Lykkegaard, research director, European enterprise applications and services at the IDC. “Open source adoption in ERP and CRM has reached a critical threshold and should now make a 'bleep' on every vendor's radar screen, particularly for those that compete in the mid-market.

Several open source vendors have attracted equity investments and industry veterans. The IDC expects a new cost squeeze to hit the enterprise applications market sooner rather than later.”