Open Source Enterprise Applications on the Rise, IDC Study Shows

Copenhagen – June 19, 2009 – An IDC survey of 515 Western European IT decision makers in organizations with more than 50 employees showed surprisingly high usage of open source enterprise applications. 9% of respondents reported current use of an open-source back-office application, while 7% of respondents used an open source CRM application.

From a general perspective, the survey showed that the main driver behind open source adoption is the absence of an upfront license payment along with a lower total cost of ownership. The main inhibitor inhibiting organizations from adopting open source applications are concerns related to the level of software support and the quality of open source software.

"In an enterprise applications market in which large vendors boast a 10% market share, adoption rates of 9% and 7% appear very high," said Bo Lykkegaard, research director, European Enterprise Applications and Services, IDC. "Of course, usage can mean anything from departmental use or niche use to enterprisewide deployment. We expect the majority of users of open source enterprise applications to use commercial enterprise applications at the same time. Despite this reservation, the survey results show that 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 midmarket."

"We see vendors of open source enterprise applications attracting equity investments and heavyweight leaders and growth rates are typically above 20% per year, sometimes much higher. IDC believes the net effect of the emergence of open source enterprise applications will be one of price pressure, in particular in the midsized segment. We do not expect a religious war between an open source community on one side and commercial proponents on the other. Rather, it will all come down to a battle over who can provide the customer with the most ERP or CRM per euro."

In the study, Open Source Enterprise Applications in Europe: Disruption Ahead? (IDC #LC07R9, June 2009), IDC examines open source adoption in the enterprise applications market from both a demand side and a supply side. The supply side perspective is covered by in-depth profiles of five open source application vendors in Europe: Compiere, Openbravo, xTuple, SugarCRM, and vtiger.

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