Wednesday, June 16, 2010


So mixed emotions here in the ERP Graveyard today. Our sometimes cohorts in the world of open source ERP, Compiere, have been acquired by Consona - the Infor wannabe funded by Battery Ventures and Thoma Bravo that has previously rolled up midmarket packages like Made2Manage, Intuitive, and the like. (See the Scorecard for a full roster)

Here's the press release. A few thoughts, and I'll trust you, gentle reader, to recall my more than usual conflict of interest in commenting on this.

There are two names that are not mentioned in the press release. That of the Compiere author and founder, Jorg Janke - who was Compiere for years and years, and can quite reasonably take credit for the "modern architecture," etc., that Consona highlights. It's true that Jorg didn't always see eye-to-eye with the open source community he helped create, and this was one of many factors that led to the Adempiere fork of the Compiere software.

Of course, probably the major factor was the initial VC investment from NEA back in 2006. And as is often the case when the VC's come in, Jorg was moved aside at some point to make way for Don Klaiss and some other managers transplanted from Oracle. But it was particularly graceless of Consona not to mention Jorg at all here; he deserves better.

The second name not mentioned, of course, is Klaiss - the (presumably outgoing) Compiere CEO. I think it would be fair to say that his tenure at Compiere was not an overwhelming success. On his watch, the company further alienated their dwindling open source community, including many of their reseller partners, by driving new product development in a more closed direction and not making source code available for new modules.

NEA put a great deal of money into Compiere, and since the value of the deal wasn't disclosed, we can only speculate about their return on that investment. But it's clear from talking to people who have become xTuple customers and partners over the past few years that they burned through a lot of money, and didn't have a great deal to show for it:
  • huge overseas development projects for new binary-only commercial products
  • salaries for a ballooning management team
  • multiple office relocations, presumably to be ever-nearer to the various centers of gravity in the California VC/software industrial complex
  • and, oh yes, just 130 customers. And that number's even lower than it sounds.
Lots of people will be asking what this means for open source, software business models, and of course, one of the core tenets of this humble Graveyard: that with all the crazy, finance-fueled M&A activity in the ERP software space, open source is a powerful defense for companies concerned about the longevity of their ERP investment.

I would humbly submit that the fate of Compiere (please don't even ask me to comment on Consona's plans for the product - see also the Infor SOA offering and Nixon's secret plan to win the war) stands as an object lesson in support of that theory.

Compiere failed as a company because it turned its back on open source - on its community of free users, and partners and customers who wanted to be full participants in the ongoing development and maintenance of the software. It's just especially ironic that the bullet was fired by someone like Consona.

More thoughts soon.

Update: Interesting questions from Frank Scavo at the Enterprise System Spectator...


  1. Ned,

    I have to admit that my first reaction, like yours, was mixed. Now with some more time to think, it is a bit shocking to wait for a new tombstone under consona in your ERP graveyard.
    Shocking because from time to time I direct prospects to the graveyard to show the point that the free characteristics of FOSS ERP and not size was determinant in the viability of ERP providers.

    Yes, you can argue that Compiere was not any longer a true FOSS ERP but still shocking to see a tombstone with Compiere name fully engraved on it.

    Best Regards

    Ramiro Vergara
    An ADempiere Business Consultant

  2. ... you might be interested in details and background from the source:

  3. Nice, Ned that you properly credit Jorg Janke. One always wonders who the real heart- beat of development is.

    The failure of Compiere due to shutting out the open source community makes sense when the traditional software business models of open or closed source are outdated like last summers milk.

    Salesforce has innovated on business models somewhat. But now instead of pushing on seems to be focusing the future on Chatter. (Yeah, Americas going to produce a lot of valuable goods using Chatter).

    Not so simply, the machinations of removing complexity to get at the feral simplicity adopted in other technologies are missing. Maybe it’s that VCs are mostly now Angels and PE funds with little powder left for innovation.

    In my opinion Larry Ellison spotted this, and acquired Sun assets to create the next generation with Fusion.

    I’ll bet Larry also expects the rest of us to sit around and wait for his R&D.

  4. Hi Clive,

    Are you suggesting that open source is an outdated business model? I'd have to disagree, if so...

    Certainly simplicity is key. It's something that is near and dear to our hearts at xTuple. We're constantly working - with our community - to make both the user experience and the underlying technology simpler and easier to use.

    Have a look at some of the discussion of our 3.5.1 release at (especially the xTuple Desktop and QuickStart Wizard features)...


  5. Ned, Super Community Hub for xTuple ERP.

    Agree, open source provides the best platform for community involvement. But not the fat profits for reinvestment.

    Isn't this why mgmts hired in from closed source by VCs keep screwing up the growth (how will SugarCRM growth do).

    I'm thinking the focus on open vs closed source software development models convolutes the business incentives. Just as Steve Jobs has done for the record industry. I think we need to rethink the platform of rewards for building/distributing ERP.

    I know it's non-trivial. To start with we need technology innovations in collections of composite apps.

    Still, why should Larry Ellison have all the fun...

  6. Maybe not fat profits in the pre-Y2K sense, but xTuple is enjoying good commercial success ;-)

    I agree that building a platform that supports easy extensions, mashups, or "composite apps" as you say. Check out for our view of this... more to come there, as we add more details on our growing XML-based integration platform. We'll be making a product announcement in another couple of weeks there.

    re: Sugar, yes, the VCs complicate things, but Larry Augustin is a sharp guy who knows open source.

    As for the other Larry, will be interesting to see what they do with Fusion. They might have as good a shot as anyone - in my view, Infor basically punted in their recent "partnership" announcement with Microsoft, and Consona doesn't even pretend to have a strategy. SAP, as always, is a big question mark.


  7. I backlinked about this from my blog as we predicted it will arrive at your blog. :)

  8. Very enlightening and beneficial to someone whose been out of the circuit for a long time.

    - Kris

  9. It may not be the place for this - but is Compiere still worth using at this point?

    I realise this post is quite dated now but I would very much appreciate the opinion of someone who I respect before I make the decision to start using it with my new company!

  10. Hi David,

    Well, I'm biased - I'd prefer you use xTuple :)

    But re: Compiere, it's worth pointing out that since this post, Consona and CDC Software "merged" into something called Aptean - which is already on its second CEO post-merger.


  11. I have been into Compiere from 1999. Disillusioned.
    Do see another FOSS , OpenERP. Seems to be thriving.