Opening for Open Source?

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To get things straight right away, no one is running Linux or other open source products on computers that are used for tax preparation, write-up or word processing. And to a great extent Linux, which has a reputation for being rock-solid reliable, has been considered something relegated to servers in IT departments at large companies.

But still, even if it's not exactly running the accounting application on Linux, the decision by Intuit to support companies that want to run its mid-market product QuickBooks Enterprise Solutions on a Linux box was a notable development.

"At the last user conference [2006], the most pronounced comment we got from IT professionals was that it was frustrating they could not run QBES on the same server they ran other applications on," says Angus Thomson, the vice president who runs the QBES business for the Mountain View, Calif.-based company.

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From an Intuit point of view, the incentive for solving that issue was that it made purchasing QBES more expensive, because it required a separate server for the QuickBooks product. That was important, since a substantial part of the QBES base is running Linux.

"We came to understand that 20 percent of 38,000 of our QBES installations are running a Linux box on the back end," says Thomson.

That still doesn't mean Linux is going anywhere fast in accounting firms. Far from it, says Matt Camden, CIO for UHY Advisors, who has been adventurous in technology, choosing to outsource as much of its IT infrastructure as possible.

"You won't see open-source application development or database suites in typical CPA firms. You might see it in larger very mature CPA firm IT environments," says Camden. "Active Directory [a Microsoft technology] integration is such a time-and-security saver for application development and user support. That is the killer app that killed Linux in CPA firms."

Still, more vendors are getting on board. Earlier this year, Sage Software said it was carrying through with a strategy of being database agnostic, which means offering non-Microsoft database engines in its applications.

That's not a pledge to launch heavily into open source. But open source may be in the plan.

"The key is writing [applications] so that we can support multiple databases," says Jim Foster, Sage Software's chief technology officer. "The customer can choose if they want to pay for the stack or go open source."

Foster says his company's approach also means developing on technology so customers will not "have to buy the whole Microsoft stack."

The stack is an industry term for the portfolio of Microsoft products needed to run a business, including networking, Internet and business applications, and the Microsoft strategy is to get businesses to go with a one-stop shop for these packages. Competitors are trying to make the cost of this bundle an issue.

In fact, Sage already has an environment that is fairly friendly to open-source products, and that is its venerable MAS 90 accounting package, which Foster says can work well because of its underlying language.

"The product that is easier to run in a mixed platform is MAS 90, because of ProvideX [the language] and its multi-platform capabilities," he says. Foster does believe that customers are looking for alternatives to Microsoft.

"I think you are going to see more and more customers caring about the infrastructure," says Foster. "I think everybody is getting fed up with their IT maintenance and vendors are asking 'How do we decrease that cost the customers?'"

Companies in the mid-market accounting application space have been moving into the Linux world slowly. In 2003, Epicor said its Vantage and Vista manufacturing applications would support Linux. Two years ago, Minneapolis-based Open Systems announced support of Open Systems Accounting Software Version 6.5 was certified to run on the Novell Linux Small Business Suite and Netix, Novell's Linux-based server operating system.

Open Systems has been active, but it's not a land-office business, and the company has said little about Linux since those announcements.

"There hasn't been a ton of movement. I don't think there has been a huge shift over the last two years," says Paul Lundquist, vice president of marketing. There has been a steady stream of new resellers and prospects interested in Linux, including those switching from the SCO Unix platform.

Similarly, Passport Software, whose product is based on the RealWorld Classic code, just shipped a Linux version, largely for Unix users who are switching.

Lundquist says OSAS inherently works in the Linux environment, with a product using Java 1.4 or higher, meaning the latest version works with any of the various Linux flavors.

What Lundquist sees is a practice that drove the Intuit experience, which is companies that have both Windows and non-Windows workstations.

Similarly, one of Open Systems' top resellers sees interest in Linux, but not an explosion.

"We are concentrating on Traverse [Open Systems' Windows product] and .Net," says Maureen Williams, owner of the reselling operation, Gaithersburg, Md.-based Applied Business Services. But Linux "is not to be ignored," she continues. About 30 percent of the ABS business comes from the OSAS line, and that includes a Florida manufacturing company with 120 users that has deployed OSAS in the Linux environment.

Williams thinks the interest stems from a variety of concerns, including flexibility. She notes, "There are still people who need the speed of an Unix or Linux environment, or who are fearful of the bug issues and dangers of Windows."

Another Open Systems reseller, Richard Paul Thomas, owner of Salado, Texas-based TBC International, says his company doesn't try to sell end users on Linux, but will recommend Linux-based systems if it feels those are the best solutions to problems.

The company often recommends Linux for Web-based businesses "if its more than just local processing," he says.

Out Of It?

Applications are emerging, if only slowly: Adaptive Planning, which makes Internet-based on on-premise budgeting software, has released an open-source version.

"There is momentum. There are a number of companies that have applications available in open source," says William Soward, CEO of the Mountain View, Calif.-based budget software specialist.


Soward acknowledges Linux's reputation as a technology for servers in the IT department, not a tool that makes its way into the hands of the business side of business. However, that, he says, is changing with the emergence of products such as Adaptive Planning's Express Edition.

The company has been vocal in its support of open source and was one of ten companies forming the Open Source Alliance earlier this year. That followed the introduction of the Express Edition in August 2006,

"We've seen statistics from AMI and Forrester-Linux server revenue is increasing," says Soward. "I'm seeing that Linux is here to stay and is growing."

Soward notes the IT Linux audience is likely to go to SourceForge.net to download a variety of open-source applications. Right now, there are 791 accounting projects (the site's term), 507 point of sale, 123 spreadsheet and 465 office suite projects. None are household names. Among the best-known are Compiere ERP and Adaptive Planning's product, the latter available at www.sourceforge.net/projects/adaptiveplan.

But finance applications are more about the business user, not the IT department, Soward continues.

Still, there have been 2,000 downloads of the free Express version, which the company pictures as not just as a try-before-you-buy approach, but a try-and-deploy-before-you-buy model, a term used by Adaptive Planning's marketing vice president Greg Schneider.

"It is clear there is need for a performance management system that is affordable and fast," says Soward. Adaptive Planning does not learn the identities of users who download the application. That only happens when they register. But the company likes the trend. "We have been surprised by the high number of titles that are finance titles or business titles, rather than IT people," he says.

Schneider believes business users are picking applications with less oversight and control from the IT department. He also says that the model forces Adaptive Planning to provide greater value to the customer because customers don't have to renew each year, as opposed to the virtually automatic renewal for maintenance agreement for traditional software.

"The vendor is not in control. The user is," he says.

Not Just For Big Guys

Not every vendor pushing Linux products is going after enterprise-size or even midmarket corporations. LongReach, an Ottawa, Ontario-based vendor that markets customer relationship management applications, is going after companies with two to 200 employees.

President Michael Whitehead has no illusions about interest in open source, among customers of this size. There isn't any, he says.

Small businesses owners "are not zealots of open source. They want something cost-effective to run their business," he says. But Whitehead's view is that open source can also provide real savings that businesses do care about.

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