Open ERP

The VAR Guy has another interesting post about a vendor in the US specializing in helping Universities implement Open Source ERP Kuali. According to the post, "universities [were growing] frustrated with traditional closed-source systems. In some cases, the universities wanted to make and share software modifications - but their software licensing agreements prevented them to do so. In other cases, colleges grew frustrated with high fees for bug fixes and maintenance releases."

This is interesting for us in two ways:

• One--we see companies gaining success specializing in implementing open source applications
• Two--it seems that defining a clear niche is helpful in gaining early market success. In the case of Kuali, it is focused on developing an ERP solution for educational institutions. The vendor or Systems Integrator, rSmart, in turn is focused on selling to the educational market, and on top of Kuali, offers and supports open source e-learning package Sakai.

In Geoffrey Moore's book Crossing the Chasm, he builds on work by Everett Rogers on the diffusion of innovations theory. He writes that a chasm exists between the early adopters of a product (the technology enthusiasts and visionaries) and the early majority (the pragmatists). Products wishing to cross the chasm (such as a lot of emerging open source products) wishing to enter the mainstream need to think very hard when choosing a target market, as it needs to gain early success there to gain a beach head and strenthen its position before trying to cross the chasm to the main stream.

This is something we are thinking very hard on as we get ready to launch ComUnion. It makes sense to define a clear market niche for the product first, instead of trying to be everything for everybody.