THE LOWEST-COST ERP?
based Web Notes Technologies is expecting to close FY2013-14 with revenue of ` 45 lakh.
While this figure looks small, Rushabh Mehta, Founder-Director, points out that even with this revenue the company is able to pay a seven-people team and make some profit.
When in 2009 Mehta developed the first version of his product, ERPNext, he saw that the ERP market was very fragmented and highly competitive. “If you ignored the top players such as SAP, Microsoft and Tally there were thousands of players who were eying market share.”
He realized that it would be almost impossible to succeed in a market which was fast evolving, so he took the bold step of giving away the software for free. “Open source is the smartest and cheapest way to market your software. An open source ERP created waves, and people started taking interest in us.”
Initially the company focused only on paid support, but later also launched a SaaS model. “We give our software for free, so anyone using our software can also compete with us. However, customers come to us because they recognize us as creators of the intellectual property.” ERPNext is built using Python, Apache and MySQL.
Approximately 70 percent of the revenue of ERPNext comes through SaaS and the rest from paid support. “Our licensing cost, which can be as low as $6 per user per year for a company having 100 users, is perhaps the lowest in the world for a hosted ERP.”
Mehta says open sourcing his product was the best decision he has taken. “Today we have customers across 44 countries. A seven-member Indian ERP company could not have gained so much traction if we had created a closed source model.”
According to Mehta, the biggest advantage of going open source is that they could build new features faster. “We have 500 developers on our mailing list, many very proficient, spending several hours every week contributing fixes, bugs and even new features, but not taking any remuneration. That’s the biggest advantage as we are able to go to market with new features faster.”
Our licensing cost, which can be as low as $6 per user per year for a company having
100 users, is perhaps the lowest in the world for a hosted ERP