Success Story : Odoo Solves Open Source’s Vexing Problem
Belgian open source application vendor Odoo (previously known as OpenERP) has set up its first overseas business office in San Jose, Calif. Traditionally, the company has worked with reseller partners in the United States and 54 other countries worldwide.
After four years, though, Odoo has begun an aggressive expansion.
It plans to have 1,000 partners around the world by the end of 2011.
Odoo’s apparent success is perhaps due to an unusual business model that rewards partners well, offers only one version of the software for both on-premise and Software as a Service (SaaS) delivery, and gives back to members of the community by incorporating their modifications into the core application.
Traditionally, open source software companies make money in one of two ways: They release a light, open source version of their product for free and sell closed-source versions with additional modules; or they offer an open source version for free and a paid enterprise edition version that has some different features, and provide bug fixes only for the enterprise edition.
So, what do you do if you believe open source software should be free with no strings attached? Fabien Pinckaers, CEO of Odoo, tried different approaches for four years before he came up with an answer: have enough customers and channel partners to ensure growth and put in place a good system of management.
Odoo provides its open source software for free under the AGPL license, either on-premise or in Software as a Service mode. It makes its money off four things: Maintenance contracts, charges for hosting the SaaS version, bug fixes and software migrations.