Open-Source ERP Solution Market

The Global Open-Source ERP Solution Market was worth of USD 2,280.2 million in 2021 and is expected to reach USD 4,001.4 million in 2028, growing at a CAGR of 8.4% from 2022 to 2028.

Market Scope

Open-source ERP (Enterprise Resource Planning) is beneficial for small and medium-sized enterprises (SMEs) that want to upgrade or customise their ERP system without paying a large licence or support fee. Most open-source ERP software systems can be used as open-source databases and operating systems that offer license-free options. ERP is widely used across various region due to its exceptional applications that manage a wide range of business processes in an organisation, including those in health care, the hospitality industry, professional services, manufacturing & distribution, construction, and many others. According to the article, manufacturers and distributors used around 18%, services used 12%, and construction sites used 4%, among other industries. An open-source ERP system is one that has its source code available to the public. It is presented in a bare-bones format and is intended for users to customise the system to suit their specific needs. The total cost of ownership is lower for open-source ERP as compared to commercial software. Along with these trends, ERP is becoming more integrated with other technologies, such as internet of things (IoT) devices, social media, to automate even more and give greater visibility and a better customer experience.

Covid 19 has adversely impacted on global open-source ERP solutions market in the start of March 2020. Due to initial circumstances of the pandemic, IT industries has seen economic downturn. However, after some time the open-source ERP solutions has helped many businesses to overcome challenges presented by the COVID-19.

Moreover, rising demand for industrial development as well as the growing adoption of advanced technologies such as AI, IoT, and analytics has accelerated the expansion Open-Source ERP Solution over the last few years. This is one of the major factors boosting the Open-Source ERP Solution market's growth. According to the article, in 2020, it was observed that approximately 93% of organisations reported their ERP projects as successful. Furthermore, ERP systems are an important investment, and they are a top priority in the market. For instance, as per the survey, nearly 53% of IT decision makers use EPR software. Now-a-days, the significance of IoT has achieved the highest value in the smart cars, smart meters, and machine-to-machine (M2M) communications. However, ERP works with IoT that utilizes a unique Internet protocol to detect, control, and transfer data to entities as well as databases. As a result, incorporating Open-Source ERP Solution with IoT data improves organizations to gain crucial business insights instantly. Because of this, the businesses across the world are preferably adopting the Open-Source ERP Solution. Hence, this factor is accelerating the growth for ERP open-source market globally.

With huge adoption and digitalization of the Open-Source ERP Solution, several market players and businesses are contributing to the market by investing millions of dollars. The key players like Odoo, Axelor, Openbravo, XTuple, OpenPro, IFS, ERPNext, infor, Microsoft, and many other are promoting to improve their sales in this ERP open source by executing various business strategies. For example, on April 5^th, 2021, Samsung Electronics has launched its N-ERP next-generation enterprise resource planning system in its regional and local offices in Southeast Asia, Southwest Asia, and China. Government initiative is also assisting the market to enhance its size. For example, on December 14^th, 2020, the Haryana government launched enterprise resource planning software to bring transparency & efficiency in the process of releasing state government advertisements and payments to media houses. Apart from this, inorganic strategies implemented by market players accelerating the market growth for ERP open source. For instance, on July 29^th, 2021, Odoo had received US$ 215 million from Summit Partners. In addition to this, on August 10^th, 2022, Oracle and Anaconda have partnered to accelerate the open-source innovations. Due to large beneficial aspects of the ERP open-source, market players are largely pouring their cashflow. This is eventually boosting the expansion of ERP open-source market all over the world.

North America has accounted for almost 41.2% market share in the global Open-Source ERP Solution market. This is due to the rising adoption of ERP software by various sized businesses. With increasing number of start-ups and rising demand for cloud-based solutions, Europe has accounted almost US$ 717.2 million in the Open-Source ERP Solution market. Similarly, government support for the implementation of IT infrastructure is expected to augment the demand for ERP software over the forecast period in the European region.

Key Players

• Odoo
• Axelor
• Openbravo
• XTuple
• OpenPro
• Frappe (ERPNext)
• easyerp
• First Telecom
• weDevs Pte. Ltd.
• Metafresh

Market Segmentations

By Deployment

• On Premises
• Cloud Based

By End Use

• Manufacturing
• IT & Communication
• Wholesale & Retail
• Finance & Professional Services
• Construction & Real Estate
• Others

Market Trends

As businesses re-open months after dealing with the COVID-19 pandemic, many are now realizing that the market is not what it used to be. Limited resources, tight timelines, and increasing customer demands are some of the challenges that even large corporations find difficult to overcome. With new challenges come new ERP software trends that help organizations cope with the ever-changing market.

Below are some key topics everyone should know about in today's world, from mobile ERP systems to machine learning and AI adoption.

Complete Migration to The Cloud (A complete migration to the cloud is happening around the world)

As of 2020, cloud adoption in various industries has exceeded expectations. Businesses that transitioned before the pandemic discovered that working remotely and maintaining productivity was pretty straightforward. In some instances, remote work has eroded productivity more than expected.

As a result, companies are embracing the cloud, with 46% of ERP solutions already in private cloud systems. Another 12% are placing their ERP systems in the public cloud, while an additional 17% are leveraging hybrid setups. Furthermore, migration to the cloud is further highlighted with 48% of companies reporting that they have completed their migration to the cloud, and some are still in progress. Nearly 19% of organizations are focusing on optimizing their cloud landscape after exploring multiple cloud solutions. Meanwhile, a third are also focusing on moving their infrastructure to the cloud.

However, around 26% of companies are still using on-premises, legacy ERP systems. As such, they struggle to meet modern business requirements such as analytics or data-driven processes. And, with most of their employees moving to remote work, these old solutions are rapidly becoming obsolete. And cloud adoption is on the rise.

ERP Platforms Going Mobile

Enterprises are no strangers to mobile applications. In fact, a market survey by Brandessence Market Research found that 78% of employees are using mobile devices to access company and work-related information when away from their computers or working outside the office. Additionally, 84% of companies reported that mobile devices are positively impacting their overall productivity.

Additionally, many ERP solutions are now available in the cloud, so it is only natural for them to move into the mobile space. Companies now need to accommodate the needs of a more mobile and remote workforce. Because of this, many features of ERP solutions have been extended to mobile devices such as, NetSuite ERP is a complete and scalable ERP solution that facilitates business processes. It provides high-growth, mid-sized businesses, and large enterprises with the right tools to accelerate growth and drive innovation. Also, Sage Intact is flexible accounting and financial management software designed for businesses of all sizes. It has powerful automation features, multi-dimensional data analytics, and other advanced functionalities that increase company acceleration. Many such solutions are now widely available. Mobile ERP systems add significant value by extending powerful functionality beyond offices, plants, and warehouses. They allow companies to be more proactive through forecasting and data analysis. With WiFi network availability and improved mobile data speeds, staff members have access to real-time data through their mobile ERP apps. For example, B2B field sales staff can have real-time updates on product supply. They can offer products that are readily available, thereby reducing customer waiting time.

Even on company premises, mobile ERP systems are valuable. Push notifications authorize key stakeholders and managers to make real-time decisions. Additionally, mobile-exclusive features facilitate data collection through cameras, geolocation, and fingerprint recognition. This allows companies to capture productivity information that would otherwise be difficult to collect.

Hence, companies are already leveraging mobile devices to increase their productivity and improve access to information. That is why ERP solution system is in a trend now.

IoT Integration

An enterprise resource planning system is only as effective as its data. To be competitive, an organization must have an efficient data collection strategy to get the most out of its ERP solutions. Fortunately, the Internet of Things (IoT) makes data collection a breeze.

The benefits of the IoT are vast in reducing the cost of data collection and system monitoring. Wireless solutions such as IoT are very cheap and easy to deploy, which has led to their widespread integration in many industries. Moreover, implementing ERP in industrial settings can reduce the costs of enterprises.

For example, the use of IoT-ERP integration in a chemical industry makes it very easy for a chemical manufacturing plant to monitor a myriad of information such as pressure, humidity, temperature, and vibration. Setting up IoT devices in their warehouses automates data collection. When information about IoT devices is fed into ERP applications, 24/7 monitoring is more efficient. This provides opportunities to reduce insurance costs as well as identify inefficiencies.

IoT is helping organizations improve their processes through efficient system maintenance and cost-effective implementation of ERP solutions. Due to this, industrial players have started adopting it on a large scale.

ERP in the Post-Pandemic World

COVID-19 has severely disrupted supply systems around the world. In 2020, the rapid spread of the virus caused a drop in consumer demand and industrial activity, leading to industry shutdowns around the world. However, with the rollout of vaccines, many areas are beginning to recover. While this is overall good news, it is not without its challenges. Businesses in various sectors have tried to reopen after being protected from the pandemic. However, many reported being unable to work fast enough to meet their growing labor needs, resulting in an all-time high of 10.1 million job postings in October 2021.

In addition, due to worldwide shortages of goods, some cannot keep enough inventory of their interests. This situation is particularly challenging for industries with complex supply chains as their operations are susceptible to disruption due to a lack of inputs from other sectors. Major industries are losing billions due to supply chain disruptions. For example, the consumer electronics sector is still suffering from a lack of resources, with 36% of companies experiencing losses of at least $100 million. Because of this, the use of Open-Source ERP Solutions has increased significantly since the outbreak of COVID-19.

But after the pandemic of COVID-19, many large enterprises, as well as small enterprises, have started adopting Open-Source ERP Solutions on a large scale. Modern ERP systems eliminate these difficulties. Using these tools, organizations can monitor sales, inventory, production, and finances in real-time. Powerful data analytics allow for more agile choices, such as making changes to the supply chain to increase flexibility. Strong e-commerce capabilities can help businesses communicate with customers more effectively both before and after a transaction. As a result, this is now a trend in every business. 

AI and Machine Learning Adoption

Over the past two decades, enterprise resource planning software has helped companies in all influential industries successfully manage every segment of their business. Over time, as business processes became more complex, software applications with machine learning methods provided a new path to the future generation, which is Artificial Intelligence ERP systems that offer companies the benefits of advanced automation technology and efficiency in operations. handling, and intelligent analysis.

However, increasing adoption of AI-enabled ERP systems is seen in organisations due to the excessive buildup of business complexity. Along with other such issues, this drains significant resources that could otherwise be used to support innovation and growth.

This new artificial intelligence technology offers numerous benefits for organisations already using ERP solutions. By avoiding error-prone custom tasks and optimizing operational processes, companies will better understand their potential. Thus, increasing market demand for AI-enabled ERP is currently emerging as a trend in many markets.

Increased Emphasis on ERP Security

Beyond the epidemic, 2020 (and subsequently, 2021) is the year of widespread cyber security attacks and data breaches. With a significant portion of employees working offsite, enterprise systems such as ERP are ill-equipped to handle the security issues presented by remote work.

The cost of each incident data breach has now reached US$ 4.24 million, the highest in 17 years. The rapid migration to remote operations appears to have led to more costly data breaches. On average, when a remote worker is involved in an incident, the cost of a breach exceeds US$ 1 million. Sectors that saw significant operational adjustments as a result of the pandemic, such as retail, healthcare, hospitality, distribution, and manufacturing, also experienced significant increases in data breach costs. By far, the costliest type of breach was healthcare, at US$ 9.23 million per incident, up US$ 2 million from the previous year.

As a result, data-intensive systems such as ERP and other integrated systems such as CRM face a large number of threats. Because of this, companies are fast-tracking their efforts to secure their ERP applications. And with the future of work increasingly favouring remote, hybrid, and distributed systems, companies are making enterprise security a priority. Because of this, the demand for Open-Source ERP Solutions is increasing in the market

By Regional & Country Level

North America

• U.S
• Canada

Europe

• U.K
• France

Germany

• Italy
• Asia Pacific
• China
• Japan
• India
• Southeast Asia

Latin America

• Brazil
• Mexico

Middle East and Africa

• GCC
• Africa
• Rest of Middle East and Africa

Report Analysis	Details
Historical data	2018 - 2021
Forecast Period	2022 - 2028
Market Size in 2021:	USD 2,280.2 Million
Base year considered	2021
Forecast Period CAGR %:	8.4%
Market Size Expected in 2028:	USD 4,001.4 Million
Tables, Charts & Figures:	175
Pages	300
Key Players/Companies	Odoo, Axelor, Openbravo, XTuple, OpenPro, Frappe (ERPNext), easyerp, First Telecom, weDevs Pte. Ltd., Metafresh
Segments Covered	By Deployment, By End Use
Regional Analysis	North America, U.S., Mexico, Canada, Europe, UK, France, Germany, Italy, Asia Pacific, China, Japan, India, Southeast Asia, South America, Brazil, Argentina, Columbia, The Middle East and Africa, GCC, Africa, Rest of the Middle East and Africa