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Is open source CRM right for you?

Until recently, the phrase "open source" was seldom uttered in conversations about CRM. In fact, the open source movement has primarily been focused on the data center, providing core functionality such as Web services, domain naming service and file sharing. But now the open source phenomenon has made its way into the world of business applications -- at least half a dozen vendors have introduced open source CRM offerings in the last 18 months -- and as their customers find success with the model, open source CRM is slowly gaining respect.

For companies that can't afford proprietary CRM software, which often comes with a hefty price tag, the economics of open source are particularly appealing. In most cases, the product is available at no cost and the only investment required is for services and support, offering significant savings on license fees. This is true even when comparing open source to the hosted CRM model, since the monthly fees associated with hosting can quickly add up. Because open source means the software's source code is freely available for others to access, adapt and enhance, there is the significant opportunity to leverage the skills and knowledge of hundreds of developers from all parts of the world.

But there is still a lot of skepticism about the viability of open source CRM, and experts warn that it isn't right for everyone. Open source critics claim lack of vendor support and less focus on rich analytical capabilities are at least two major drawbacks for open source CRM.

"Open source is a great alternative to jump-start a custom-built application, but it still is not as functionally rich as a packaged application," said Sheryl Kingstone, CRM program manager at Boston-based Yankee Group. "When evaluating the total cost of ownership, be sure that you are fully comparing 'apples to apples,' including future upgradeability and time to stay on top of competitive differentiating technology."

Others, like Bernard Golden, CEO of San Carlos, Calif.-based technology consulting firm Navica Inc. and author of the book Succeeding with Open Source, believe that open source CRM offers tremendous potential -- if you understand from the start what you are getting with an open source product.

Golden offers the following five tips for those who are evaluating it.