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Openbravo’s ERP Draws International Cheers

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With open-source ERP deployments now starting to take more hold, Spanish-based Openbravo is quickly gaining international penetration, garnering thousands of downloads a month of its Web-based software from all over the world.

“We received more than 20,000 downloads from SourceForge in November [of 2006], and we’ve maintained our position as one of the 10 most active projects on SourceForge, among more than 155,000 projects. We’re growing the company through a network of partners,” said Josep Mitja, COO of the dot org, which began life back in 1999 as an open source project in Navarre, a region within Spain’s historical Basque Country.

At this month’s LinuxWorld OpenSolutions Summit in New York City, Openbravo joined with JasperSoft, SpikeSource, CollabNet, Sourceforge.Net, and several other players in founding the Open Solutions Alliance (OSA), an effort to obtain better application interoperability through discussions, best practices, and tools, as well as through teamwork with system integrator (SI) partners.

In an interview with LinuxPlanet, Mitja said that Openbravo is gearing its open source software mainly to SMEs (small to medium-sized enterprises) and government agencies, which are less able to afford products and services from commercial ERP giants.

“People are getting a little tired of getting locked into long-term licensing contracts with big vendors,” he contended.

“ERP for SMEs represents a multibillion dollar market. I’m sure that open source will have a strong impact there, whether through Openbravo or someone else.”

Last month, the vendor released Openbravo 2.21, a major update that adds new capabilities in material requirements planning (MRP), manufacturing, service projects management, price adjustments/discounts; multicurrency support; language localization; security; and technology for preparing test environments and organizing code into smaller projects.

On the MRP side, for example, processes for defining work requirements and procurement orders are now automated in Openbravo. Each product now has its own planning method, and it can be assigned to planning documents such as purchase orders and sales forecasts.

Openbravo uses a database structure originally based on that of Compiere, another open source ERP player. According to Mitja, only about 10 percent of Openbravo’s code is derived from Compiere. “But this is not something where I want to enter into semantics,” he noted.

Mitja also drew a rather large distinction between Openbravo and Compiere. “We are entirely Web-based, whereas Compiere uses only a client-server architecture. You need to be Web-based to be successful today. Web-based software is much easier to deploy, maintain, and so on,” he told LinuxPlanet.

Openbravo’s Java-based ERP software works with both Oracle and Postgre back-end databases. It also supports all major browsers and server platforms, including Linux and Windows.

Openbravo has its roots in an open source project launched in Spain during 1999. A company called Tecnicia sprung from the project in August of 2001. As its objective, Tecnicia aimed to develop “the most adaptable Web-based open source software in the market,” according to Mitja.

In mid-2005, the entity evolving from Tecnicia developed a business plan to grow its operations internationally. The following January, Openbravo nailed down financing of 5 million Euros – amounting to 45 percent of its funding – from Sodena, the main business development mechanism of the Navarre government.

Mitja acknowledged, though, that Openbravo has faced challenges along the way, and that others still loom ahead.

So far, most of Openbravo’s customers for open source implementations are located in Spain and South America. “We have a small but happy customer base,” he said. Spanish-based customers include a frozen foods distributor called Frilac; a regional textile and synthetics distributor named Huesker; and Galenicum Health, a pharmaceutical and healthcare solutions provider.

But according to Mitja, Openbravo has won out on some of these deals over the likes of Microsoft and SAP.

The company has nailed down contracts in South America, too, including a $3 million contract for a health center deployment. “And we’re also seeing a lot of traction where government wants to go to open source,” Mitja told LinuxPlanet.

The start-up is also working hard on expanding its geographic reach. “One of the biggest challenges is that ERP is such a complex product,” Mitja said. Consequently, Openbravo has focused on adding SI partners, as well as training sessions in various locations, including New York City, Brazil, and Germany.

About 25 partners have been named so far, and the open source vendor is now on the lookout for more – especially SME-oriented SIs of the large, international variety.

Openbravo has turned strongly to Web-based outreach, too. In April of 2006, Openbravo published its code on Sourceforge, launching a Web site at that same month. By July of that year, Openbravo was the most active ERP project on Sourceforge, according to Mitja.

“People have also been finding us through [Web] search engines and bloggery,” he told LinuxPlanet.

The open source organization is also planning to open up a second office in Spain, while “analyzing our options for an office in the Silicon Valley,” Mitja said.

Ultimately, Mitja foresees a business model for Openbravo somewhat along the same lines of the one long pursued by Linux distributor Red Hat Software.

“We’re planning to offer a professional edition. The software will be exactly the same as the open source code available through Sourceforge. But there’ll be a contract [with Openbravo] attached to upgrades, tech support, and so forth,” the COO said.

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