Proprietary software vendors drive on average 25% of their revenues from Licenses. How does OpenERP do without license revenues? OpenERP revenues are indeed services based.
The software can be downloaded for free, but we will never claim that deploying an ERP can be done for free. It requires services from OpenERP and our partners. In order to secure the right level of support to our customers, we offer Online and Onsite subscriptions. Online Subscriptions is a monthly fee which allows our customers to use the Software in a SaaS mode. Onsite subscriptions is an annual fee which provides bug fixing, security alerts and migration services for customers who wish to deploy the software on their premise.
Our Open Source model also allows us to maintain a lower cost structure thanks to:
- An efficient Development model: We leverage from the improvements in the software driven by our customers and community members. As a result more than 500 modules have been developed to date. The software is available in 22 languages and more than 800 individual contribute to OpenERP.
- A volume based sales model: The software can be downloaded for free. Thousands of customers from over 50 countries test it every month and when the time is right for them, they turn to us or to one of our partners to implement our solution. This allows us to reduce very significantly our sales and marketing costs compared to other vendors
- A single platform for both on line and on site: OpenERP has been designed from the start to be used either on line or on site. This is not the case for most vendors who need to carry their legacy software and can’t leverage from the web. Leveraging a single platform for both online and on-site services results in very significant savings for OpenERP.
The absence of license revenues is more than offset by the benefits driven from the Open Source model