| Experts
Archive |
 CRM investment is wasted if the intelligence it delivers fails to influence despatched communications. How can businesses ensure that money spent on CRM analytics actually begins to benefit the messages that are delivered to customers and prospects?
David Jefferies, Marketing Director, Pitney Bowes |  |
How can targeted loyalty programs help you ride out a slowing economy?
Andy Wood, MD, GI Insight | |
How do the data security requirements for credit card transactions affect my contact center operations?
John P. Joseph, VP Corporate Marketing, Envox Worldwide | |
CRM relies on trust between business and customer. Consumers are constantly asked for personal information from a wide range of organisations, but who are the industries most trusted by UK citizens to safeguard this data? And which sectors must work harder to earn this trust?
David Jefferies, Marketing Director, Pitney Bowes | |
How can I reduce the risk of a security breach when a customer calls?
John P. Joseph, VP Corporate Marketing, Envox Worldwide | |
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 | Bo Lykkegaard, Senior Research Analyst, European Software Group, IDC You Asked
Is there demand for open source CRM Applications? What are your predictions for the future? | | |
The Expert's Answer
IDC is currently working to uncover customer demand in Europe for open source software, including CRM applications. Adoption of open source CRM applications is in the inception phase over the overall technology life cycle. More than half of the open source CRM applications tracked by IDC has been launched within the last year. While some vendors claim tens or hundreds of thousands of downloads, actual implementations are very few.
Many barriers to user acceptance must be overcome. Companies fear basing core business processes on software that does not have the centralized support, lack future product commitments (i.e. roadmaps) and does not have a single legal entity behind it.
Other key barriers include overwhelming numbers of product updates, low product maturity and high implementation / maintenance costs. Especially last barrier - the high implementation and maintenance cost – could force small and mid-sized businesses to refrain from buying into the open source model. Small businesses normally do not have the specialist skill sets (Java, PHP, Linux, etc.) required to handle an open source implementation.
New commercial models are emerging to reduce these barriers to adoption.
Commercial open source vendors, such as SugarCRM Inc., Knowgate, ComPiere Inc. govern and consolidate open source CRM projects – and more importantly – dedicates professional resources to product development. Commercial open source vendors generate revenues through sales of premium versions, through sales of product support and customization services. They provide a third and second level product support similar to what a traditional ISV provides.
Local partners increasingly provide first level support along with implementation services. Both open source vendors and partners can offer periodic upgrade packs and patches to lower the cost of maintenance.
The commercial open source vendors also secure the future direction of product development and take on costly product-related tasks such as quality assurance, product documentation, central web site provision and public relations.
Open source is maturing into a new commercial business model, backed by for-profit enterprises. One of the most mature commercial open source vendors, Red Hat Inc., now runs net margins of 24%, a level of profitability most software companies can only dream about. In a time when software-as-a-service offerings threaten the revenues of services providers, open source software opens a new sales model consisting almost exclusively of services revenue, since the software license is zero or very low.
Also, it provides a fast entry for new ISVs who do not have the resources to develop an entire CRM platform from scratch. Finally, hosting providers can now provide CRM applications without paying upfront license fees, and they can do so on top of the increasingly the increasingly common “LAMP” (Linux, Apache, mySQL, and PHP) infrastructure stack.
Commercial and non-commercial open source applications are seeing strong adoption in other software markets, such as operating systems, web servers, development tools, and application servers. In the CRM applications market, open source is at a much lower maturity level and mainstream adoption lays years head. But it is coming.
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