Opening ERP's Future - Manel Sarasa

Openbravo Get TogetherBusiness dayOpening ERPs future!

Barcelona, 12th April 2008Speaker: Manel Sarasa, Openbravo CEO

Page 2PR-OB Get Together-OpeningERPsfuture-April2008BCN-MSA

bem vindo

bienvenuebienvenidowelcome

benvenuto Willkommen

Get Together

BARCELONA2008

benvingut

cứ tự nhiên

20 countries represented

välkomnande

welkom


Agenda (12th and 13th April 2008)


Why Open Source matters?

The ERPs market opportunity

Openbravo at a glance

Q&A

Agenda

10:00 – 10:10

10:10 – 10:20

10:20 – 10:30

@ lunch?


Main features

What is open source?

• Freedom to use the program for any purpose

• Permission to freely redistribute copies of the software

• Unrestricted access to the source code to study how it works, and...

• … freedom to adapt and customize the program for any use

Revolutionary aspects


• Changes the way software is developed– A large community is ready to

participate in very diverse development related tasks

• … speeding up the process and reducing Engineering costs

2

• Changes the way software is distributed and sold– Software is available in the

internet facilitating dissemination

– Software sales shift from a proactive approach to a reactive one

• … facilitates and reduces Sales & Distribution costs

1


• General statistics

• Number of accumulated downloads: 350.000 (600.000 in April 08)

• SourceForge ranking: top #6 (now 1#)

• Forums

• Number of forum messages 872 (September) (1.033 in March 08)

• Number of non-OB unique users participating monthly in the forums: 170 (now 220)

• Wiki

• Monthly Unique visitor / page view statistics: 13.000 unique users / 120.000 pageviews (18.000 unique users / 169.000 pageviews)

• > 900 registered users (in March 08, 1.400)

• Bug

• 2056 bugs reported (76% submitters are contributors) (now 2800 approx.)

• IRC

• Number of users in the IRC channel: 20 users (Spanish + English)

• Localization

• Number of published localizations: 10 (41 active projects) (now, 16 published, 48 active projects)

Some Openbravo community indicatorsWhy Open Source matters?

From last Get Together Oct. 26, 2007 until today


The new economics of Open Source software

Conceptual

14%

38%

8%

18%

22%

50%

50%

Traditional Software Business Model

Licenses

Services

Cost ofsales

R&D

Sales &Mktg.

G&A

Income

Revenues

Costs

Open Source Business Model

7%2%

5%

18%

18%

50%

0%

Licenses

Services

Cost ofsales

R&D

Sales &Mktg.

G&A

Income

Revenues

Costs

Commercial open source companies develop business models leveraging the two previous aspects presented.

Source: Own elaboration based on Open Source Catalogue 2007. Optaros.



A couple of ideas from OSBC 2008Why Open Source matters?

Source: OSBC Northbridge VP 2008 Annual results

“Regardless of what is your preferred answer... Open source is and will continue to grow and expand massively!!!”

Today: Over $2B invested and over $2B returned already returned to investors





Q&A

Agenda

11:30 – 11:40

11:40 – 11:50

11:50 – 12:15

@ lunch?


Consensus exists SME market for ERPs is huge with strong growthThe ERP market opportunity

“ERP packaged software market for SME’s totals US$

30bn”

“The combined market size for

small and mid-sized companies totals

around US$ 45bn”

“Non-proprietary (custom) ERP

applications market projected to reach US$ 36bn by 2008”

Forrester research shows current importance of open source software:

– 82% of respondents use O/S software for non-mission-critical applications

– 79% of respondents use O/S solutions for application infrastructure

– But also already 54% of respondents are using O/S software for mission-critical applications(page 11, table 4; Forrester, March 2007)

Gartner estimates that by 2010:

– 80% of mainstream IT organizations consider O/S solutions for Infrastructure focused software solutions

– And 25% consider O/S business software solutions

Average application lifecycle is 10-15 year

Current experience is that many (small and local) ERP vendors active since nineties that target SME’s are struggling to provide continuity for their software packages:

– Many already out-of-business

– Or do not have resources to follow pace of innovation

Source: different independent business parties like SAP, AMR, IDC, Forrester research or Gartner.


SME’s have been consistently underserved by proprietary players

Situation of the market provides a solid basis for innovative new ERP vendors like Openbravo– Very large market (US$ 30bn), many SME’s per country

– Strong growth potential: ERP adoption rates among SME’s in developed markets 20-50%

Complication for SME’s in selecting and ERP is that they are consistently underserved while experiencing a growing need for state-of-the-art management solutions:– Growing market sophistication, competitive intensity, and regulation push SME’s to invest in ERP

solutions.

– Most proprietary players have not been able to effectively serve this market:

• Large consolidated players either have catered to corporate market (e.g. SAP, Oracle,…) or have insisted in expensive software business models (e.g. Microsoft,..)

• Local vendors, of which there are many, either offer verticals or software with partial functionality Question for SME’s is how to close the gap between their needs and the traditional market

offering:

Openbravo offers a serious alternative with our fully-functional, web-native Open Source ERP



The SME-market is a perfect match for open source solutions

Source: client feedback. Openbravo analysis.

• Better price-quality ratio than proprietary solutions: users “get more for less”

• No need to be bound to complex licensing restrictions

• More freedom in supplier relation: no vendor lock-in

• Fewer limitations to adapt the solution to firm specific needs

• Growing interest from IT providers that target SME’s in Open Source

Critical segment characteristics

Key factors to assure match with open source ERP'sSegments

SoHo

Corporate

Small companies

Medium-sized

• Mid-low adoption rate- Often existing packages are not

integrated and become obsolete

• Competition and rulings push to implement ERPs

• Firm specific situations imply complex system requirements

• Low adoption rate

• Implementation costs often too high- Small budgets, price sensitive

• Typically, little understanding of technology and no resources for IT & Systems management






Q&A

Agenda

11:30 – 11:40

11:40 – 11:50

11:50 – 12:15

@ lunch?


Building the reference company in the Open Source ERP space: best product +

best partner network + best professional company. All of these areas are critical

to support / ensure company’s growth

Building the reference company in the Open Source ERP space: best product +

best partner network + best professional company. All of these areas are critical

to support / ensure company’s growth

What is Openbravo aiming for?

• Lead the development of the best open source web-based ERP product and platform: keep expanding our product core investing on key features demanded by our target market and keep improving usability

• Continue worldwide dissemination of our product: support our growing international community to further adapt our product to different international markets

• Build a strong operations unit to support our partners’ business plans: keep accelerating the build-up of a structured Operations department ready to cope with the huge demand which exists around the product today

• Continue attracting and developing best-in-class professionals and open new offices internationally to improve quality of service

• Capture best in class investors: accelerate our business model by getting to an agreement with leading VCs in the space

• Lead the development of the best open source web-based ERP product and platform: keep expanding our product core investing on key features demanded by our target market and keep improving usability

• Continue worldwide dissemination of our product: support our growing international community to further adapt our product to different international markets

• Build a strong operations unit to support our partners’ business plans: keep accelerating the build-up of a structured Operations department ready to cope with the huge demand which exists around the product today

• Continue attracting and developing best-in-class professionals and open new offices internationally to improve quality of service

• Capture best in class investors: accelerate our business model by getting to an agreement with leading VCs in the space



Setting the scene: history and evolution of the company

Company begins as a project. It is lead by 3 co-founders who thought it was necessary to create an ERP that was able to

better satisfy SMEs needs.

Aug’01: Tecnicia is founded in Navarra with the objective of

developing the most adaptable web-based ERP in

the market. Open Source business model is followed

Founding Dev. Expansion19992002 2005

Jan’06: Sodena approves a financing agreement of € 5

Mio. and some external additions to the executive

team take place.

Apr’06: Openbravo publishes its code

in SourceForge and revamps its

corporate website.

Jul’06: Openbravo becomes #1 ERP

solution and one of the most active

projects on SourceForge.

Openbravo strongly believes that there exists a great opportunity to change ERP’s market dynamics through Open Source and is committed to making it happen.

Apr’07: Openbravo launches its official full fledge partner

program. The first ever 100% quality-based

partner program

>>>

Openbravo keeps growing and leads the ERP Open

Source arena (employees, downloads, partners, hits,

new releases, innovation…)

Focus of this chapter



• Openbravo has remained one of the TOP 10 most active projects in SourceForge since it entered this ranking back in Oct’06 (among more than 150K Open Source projects)

Openbravo has surpassed the 1000 daily mark in terms of # of total downloads.

It has already become the most downloaded ERP in ALL categories tripling any other OS ERP solution.

• Significant increase in terms of traffic for www.openbravo.com: average weekly website traffic up from ~ 2,5K unique visitors to 7K+ and average # of visited pages up from less than 10K to up 40K+!

• Openbravo has tripled the number of Google search results up to 300K+ and has jumped from 5th page to 1st page in Google when searching for “open source ERP”.

• Last year, only a couple of localization projects were active. OB is currently being localized for more than 30 countries (several Pioneers are leading some efforts). On the other hand, several localizations have been finalized (e.g. Australia, Brazil, China, France) …

• Extensive presence in the media worldwide and founding: local and global. Even on TV!

• Several success stories created by OB directly and by some partners. Some of them including new types of industries; some quite relevant… and many more to come!

EvolutionApr’07 Mar’08

Openbravo at a glanceOne year of impressive evolution!


We even won several

prestigious awards!

LinuxWorld’07 Expo Product

Excellence Award (Aug’07)

Infoworld Bossie Award 2007 for Best

O/S ERP (Sep’07)

RedHerring Top 100 to one of the most

innovative companies in EMEA (Mar’07)

SourceForge Project of the Month for Sep’07 awarded

to Openbravo amongst more than 160K projects



Members

Friends

We also co-founded the Open Solutions

Alliance!



Do you know why?

Aspects that have made it possible

Because we have built a best-in-class team… and we are doing the same thing in terms of partner network and community!

1

Because we all are successfully introducing our product into new markets around the world!

2

Because we continue to invest in evolving our product!

3

Because we have defined and launched professional products and services to support our partners and satisfy our end

customers!

4

Next >>



A differentiated strong Product Value Proposition

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Product overview

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Openbravo is the ERP of choice for SMEs that provides value to organizations of all

sizes. Openbravo’s Engineering team leads and inspires its worldwide community

Micro

companies

Large

corporations

SMEs

my complete ERP

all the functions you need in a

single integrated package

my own ERP

a packaged software as the basis of

your custom solution

my scalable ERP

a system that grows with my

company

The product

that

lives with you!

Product overview

Product positioning


•And finally...

Some Openbravo community indicatorsOpenbravo at a glance


Openbravo Network has been launched - Why is it crucial to End Clients?And finally…

Openbravo Network provides all End Clients with:

Openbravo Network is the best way for End Clients to leverage professionally the leading open source ERP

1. Peace of mind: all you need to have your open source ERP working professionally with a guaranteed support contract at one click

• Cost of ownership: more price-competitive investment than with traditional proprietary solutions, including lower spending for maintenance and traditional First Level Support

1. Productivity: increased productivity through better assured “up-time”, optimal performance and an always updated system

1. Freedom: no “Vendor lock-in” since customer is free to end subscription anytime if desired and has complete access to all ERP code (as it is open source)

+ Includes optimized stack

= Full warranty (updates, bug fixing)

Professional Support


Openbravo POS was acquired and now growing!And finally…


Thank you!

Openbravo Get Together

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