Open source biz apps coming to the cloud

There's open source software, then there's the cloud, and thus far, the two have been mutually exclusive. But that is starting to change.

On Wednesday, SugarCRM made its array of applications available first and foremost as hosted services, and unwrapped the Sugar Open Cloud, which it describes as an on-demand open platform.

"Parts of open source and parts of the cloud come together," explained Martin Schneider, SugarCRM's director of product marketing.

Essentially, customers buy a license that gets them access to the hosted application, SugarCRM's platform and tools, and the code itself, Schneider said.

"We are in the middle of a large paradigm change right now," said Denis Pombriant, founder and principal analyst of Beagle Research. "New models are taking to the forefront."

Indeed, open source ERP vendor Compiere also has a hosted edition of its applications. In March, Compeire made its ERP available on Amazon's EC2 such that customers can tap Amazon's cloud for ERP services including accounting, purchasing, order fulfillment, manufacturing, and warehousing.

SugarCRM, for its part, on Wednesday detailed a new lineup that features Sugar Express, which costs $8 a month per user, Professional for $30 per user per month, and the Enterprise iteration that costs $50 per month for each user.

SugarCRM also unveiled Sugar Open Cloud for managing SugarCRM and other applications. Sugar Open Cloud consists of tools for application delivery, integration services, fault-tolerance, monitoring, and security.

"We really want to push people to the cloud," SugarCRM's Schneider said. "It's the best way to manage the applications. Why deal with servers?"

For those customers that do prefer to install and manage the application on-premise, however, each edition of SugarCRM comes with a download key. "It's the user's choice," Schneider added. "They can run it themselves or just install it for things like testing and development, or working offline."

And, yes, the free community edition is still available, just not as a hosted service.

Tim Hickernell, lead analyst with Info-Tech Research Group, commented that he believes open source apps in the cloud will become just as attractive as proprietary hosted services, and that customers should judge them on the same criteria.

"I don't think companies should focus on whether it's an open source service or a commercial service, but instead should focus on who is offering the service," Hickernell added. "When subscribing to services in the cloud, CRM or otherwise, companies need to consider the viability of the provider, just as they should if they outsource a commercial application."

Both Hickernell and Pombriant said that they envision SaaS providers such as Compiere and SugarCRM, as well as NetSuite, Salesforce.com and others, will take on the role of trusted intermediaries that effectively aggregate cloud services to not only leverage tools of behalf of subscribers but also run the complex networks.

"It's hard to tell what models will be successful but we are in a period when companies will be experimenting," Beagle Research's Pombriant said.

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