With Linux considered "ready", where do all the open source developers turn to? Red Hat and Novell are aiming their efforts at middleware, because that's where the money is for operating system vendors. But according to Larry Augustin, CEO of Medsphere Systems and founder of VA Linux, there also is a huge opportunity in the market for enterprise applications.
He sees green pastures with small and medium sized enterprises, where the traditional enterprise applications from SAP and Oracle are too expensive. Open source requires less of a development investment and spends less money on sales and marketing (which in the case of Siebel systems makes up about 30 percent of the total costs). As a consequence customers in the SMB market are able to afford the solutions. And over time, maybe, open source enterprise applications are able to move up to larger customers.
Medsphere sells an open source enterprise application for hospitals that was originally developed with tax dollars. There are similar offierings for open source CRM and VoIP PBX.
Augustin however conveniently leaves out ASPs such as Salesforce.com and Netsuite, who are showing some muscle in the very same SMB market that he is after. You can also have your doubts about the appeal of an open source solution for a user that already has an ERP system up and running.
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