To get a clearer perspective on open source, let’s look at the typical model for software today. A software company develops an application such as an ERP system that works well, and provides real business value. All well and good. Except that the client not only buys the application they need, but they also pay annual fees to license the underlying software. In addition, the system is usually proprietary, that is, it has its own particular way of doing things and does not integrate well with other systems. Application updates need to be done with certified engineers specializing in that software, which adds to the costs.

With open source, the software is free for anyone to use, and the community of programmers contributes to the code base. One organization coordinates the management and development, that’s true, but they do not sell the software as such. Independent IT companies are therefore able to develop applications for themselves, and for their clients, using essentially free software. Now the big question: how do people make money on this?

The independent consultants charge for customization of the application for a particular client, implementation, training of staff, and for further updates. But the client benefits from a lower cost because there are no software license fees to pay.

The organization that owns and manages the software makes money from partner programs such as consultant training, and can also provide custom solutions using the software to their own clients. It can also host the solutions and charge for monthly IT infrastructure use.
The additional benefits to the customer are many. The software base become very stable and functionality increases as there are a large number of developers who contribute to creating and testing the software. It’s based on open standards so data can be easily exported and used by other applications. Numerous consulting companies are available to work on the application as it’s all standard – there’s no proprietary lock-in.

Terra has joined the revolution – enjoy the benefits yourself! Contact us at sales [at] terra [dot] com [dot] cn