Impact Report

Open source ERP that goes all the way to xTuple: OpenMFG re-brands

Analyst: China Martens
Sector: Enterprise Software »»
Date: 27 Sep 2007
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We recently caught up with the six-year-old company formerly known as OpenMFG, which has renamed itself xTuple to indicate its status as more than a single-product company. While the commercial open source OpenMFG ERP suite remains the vendor's flagship offering, xTuple has two other products: OpenRPT report writer and a new, fully open source version of OpenMFG called PostBooks.

Xtuple is in growth mode. The firm's keen to attract the attention of enterprise customers in addition to its traditional SMB users, many of whom hail from the manufacturing sector. Over the past year, xTuple has widened its software scope, ramping up OpenMFG's CRM capabilities. The company's also eager to expand internationally, which may require it to seek outside funding for the first time in its history.

Impact assessment

Context

Based in Norfolk, Virginia, xTuple's core staff number about 12, with another dozen consultants. The company has been profitable for the past two years. Throughout its six-year history the vendor has been self-financed. That said, xTuple is starting to have initial conversations about a possible series A round of funding to finance future international expansion. The company's looking for more than cold, hard cash – it also seeks VCs that can evaluate and then line up potential partners for xTuple, particularly in Asia-Pacific.

OpenMFG is something of an anomaly; the software's not based on Java or .Net. Instead, its graphical client was written using Trolltech's Qt toolkit for C++, while its server portion runs on the PostgreSQL (Postgres) open source database. XTuple is also noteworthy in that its software runs natively on the Macintosh operating system as well as on Windows and Linux.

Before the advent of PostBooks, OpenMFG drew snickers and carping from some in the open source community that the vendor didn't deserve to put 'open' in its company name, since it made its software available under its own more restrictive OpenMFG end-user license agreement.

Going fully open source has been something the vendor has periodically reviewed every three to six months throughout its existence. The incentive to finally take the plunge and release PostBooks was driven both by user demand and the sense that the company's CRM capabilities were properly fleshed out.

So far, xTuple has focused its attentions on the CRM that companies call upon after they've acquired a new customer, including user history and a contacts manager. This means no conflict at present with providers of sales force automation and campaign management. We're keen to see xTuple strike up partnerships with such vendors and others in the open source world to create the combined stacks of software that are proving popular with some users.

XTuple has no immediate ambitions to become a full-blown suite provider, the equivalent of an open source NetSuite. Instead, it continues to see the world through ERP spectacles, viewing CRM as just another subset of ERP.

Customers

XTuple hopes to have 100 paying customers by year end, up from the current 75. A typical customer is one with $50m or less in annual revenue. Customers using OpenMFG include food manufacturer Cedarlane Natural Foods, athletic and surgical garment maker Marena Group and oil field equipment company Richart Distributors.

XTuple tends to have 10-15 users at each of its paying customers. Companies can choose either an annual or a perpetual site license. To date, the split between the different licensing options has been a straight 50/50. For 5-19 users, the annual site license for OpenMFG is $1,000 per user per year, compared with a perpetual license at $3,000 per user, with a five-user minimum. While the annual option includes software maintenance, the perpetual license requires a first-year payment of $540 per user.

Marketing

Name changes are notoriously tricky beasts. On the plus side, xTuple is still small enough that abandoning the OpenMFG moniker is unlikely to unsettle its existing paying customers.

However, xTuple is an odd choice. The made-up word is meant to indicate the possibility of massive growth. Not mere doubling or quadrupling, we're talking xTupling. It's a bit reminiscent of the amp with settings that go beyond the traditional 10 to the 11 in the 'rockumentary' movie 'This Is Spinal Tap.'

The name's also supposed to be geeky, with a nod to the tuple term used in math and computer science to refer to points of data or the rows of a database. Confusion over spelling and pronunciation may result in people not easily finding xTuple online. Still, once heard, it's certainly hard to forget.

PostBooks is a smarter name, with the inference that here's a product a step above Intuit's QuickBooks accounting software. There's another database reference, this time to Postgres. We wonder whether xTuple should have simply rebranded all its products and the company as 'Post-something-or-other' as a unifying call to celebrate one of its differences – its Postgres basis – from other software on the market.

Technology

PostBooks debuted in beta at the end of July, the same time that OpenMFG became xTuple. The final release of PostBooks appeared earlier this month, along with the latest iteration of OpenMFG suite. Reflecting plans to keep the two products in sync with each other, both releases are known as version 2.2. The 2.3 releases are due out in December.

OpenMFG and PostBooks share the same code base and are identical on the graphical client side built using Qt. The difference between the two products is on the Postgres database server side. OpenMFG includes high-level functionality such as multiwarehouse inventory, manufacturing resource planning and bills of operations.

XTuple intends for each offering to feed the other. On the PostBooks side, there's work taking place now around installation, APIs and QuickBooks migration, which should also appear in OpenMFG.

The vendor hopes that larger companies interested in open source will take advantage of the new PostBooks to fully experiment with the software and see how well it scales, something not fully possible before with OpenMFG, given its licensing restrictions.

For each of its three products, xTuple uses a different license. OpenMFG is available under the company's own end-user license, while PostBooks is one of the first products to be offered under the Common Public Attribution License approved by the Open Source Initiative. OpenRPT falls under the GNU Lesser General Public License.

While OpenRPT is an integral part of its ERP suite, the report writer can also be used as a stand-alone product, functioning as an open source alternative to Crystal Reports from Business Objects.

Competition

XTuple positions itself as both an open source alternative to Intuit's QuickBooks and to Sage Software's Peachtree accounting software, as well as a step up from those products as users look to deploy their first-ever ERP applications.

In terms of customers eager to replace their existing ERP software, the company xTuple tussles with day to day is Microsoft. Of Microsoft's four different Dynamics ERP families, it's Dynamics NAV that xTuple's OpenMFG faces off against most frequently.

Also in the field are SAP's Business One suite and a variety of products that were acquired by Infor, including Baan. Then there's Consona, formerly M2M Holdings, with its .Net-based Intuitive ERP software, which, like xTuple and Infor, has a manufacturing focus. XTuple does run into open source Compiere on occasion and is likely to encounter Openbravo, should it become more of a player in Europe.

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