On Free Software

June 20, 2019: Let's take a brief stroll down Memory Lane... back to a time when a lot of people didn't recognize, or were a little afraid of, the phrase "open source." And what that means today for xTuple and our community of customers.

These were the heady days of the 2000s, when there was a whole conference called LinuxWorld that actually drew thousands of people — when the big debates raged around different versions of open source software licenses, and what category of commercial software would be consumed next by the forest-burning revolutionaries of the Free Software Movement.

First it was server operating systems, then web servers, then databases, and on up the "stack" of information technology infrastructure. Then the world was introduced to a concept that had been around for a while but got a sexy new name: "The Cloud." A whole new stack of mainly open source infrastructure built up around the massive data centers that powered everything from corporate email to streaming television.

And one day, almost imperceptibly, the IT world looked around and decided that for the world of commodity tools and infrastructure, it would be dumb to use anything *but* open source. Because the horizontal nature of these tools meant that large numbers of businesses had a shared interest in developing them in an open fashion, it was a no-brainer.

Further up the "stack," however, the picture wasn't as clear. Our own business began life as "OpenMFG," and had a commercial-only shared-source license, but not a free version. Our friends at companies like SugarCRM were experimenting (and occasionally getting burned) with various open source licensing approaches. And in 2007, OpenMFG changed its name to xTuple, and launched PostBooks®, the free and open source core of what became the xTuple ERP suite.

For many years, that was a pretty cool differentiator for us as a business. We had great success on two significant fronts:

1) improving the product itself by welcoming code enhancements from the larger community, and

2) getting PostBooks® in front of millions of people as a "starter" edition, giving them the option of upgrading to one of our commercial products when their company growth and sophistication required it.

That second point was largely driven by a small number of open source community websites which became the go-to place to look for open source software. We began to see a bit of a dichotomy between two groups — people who were looking for source code, to actively engage in collaborative software development; and people who were just looking for free software to download. What happened out in the cut-throat marketplace of ideas was that one company (GitHub) did a very good job of attracting the first group but wasn't terribly interested in the second group. That left the websites catering to the second group scrambling for a business model — and frankly, we don't think they ever found one.

There have also been two very impactful evolutions in how companies evaluate, purchase, and implement ERP software. These have been coming on slowly for some time, but seem to have accelerated in recent years. As we touched on before, the cloud is now a bigger and bigger driver for application decisions of all kinds. While we believe that some software vendors (who we won’t name!) are cynically positioning their cloud offerings as an updated means of vendor lock-in, there’s no denying the fact that the convenience and flexibility of cloud-hosted applications has changed the way everyone consumes software. The other interesting change, however, has to do with who’s making the decisions in ERP. We’re seeing buying decisions are driven more and more by functional business leaders — not as much by IT staff. That’s a significant development for a company that has IT geekery baked into its product, corporate identity, even its name.

So why am I sharing all this?

Here at xTuple, we've been engaged in a top-to-bottom review of how we do things — a core element of any continuous improvement process that quite candidly we've neglected for too long.

One of the things that has become obvious to us is that having a free open source starter edition just isn't that big a deal any more. Sure, we have a steady stream of folks who continue down that path of "upgrading" to a paid commercial product after kicking the tires on PostBooks® — and we continue to get quality code contributions from our user community as well. But by and large, we're realizing, we could still have both of those things in a commercial shared-source approach more like where we started with OpenMFG

When we're considering how to make our R&D investments for the future, we want to focus on the hundreds of companies with whom we have a close, commercial relationship. We also want to define spaces in the marketplace where we have a more unique offering, spaces where we cannot just compete, but win.

For many years, FOSS (free open source software) was a big part of that. But the world has changed, and what we're seeing and hearing over and over again in the marketplace is that other criteria are more important when selecting enterprise application software closer to the top of "the stack"— and that indeed, technology terms like that are often incidental to the entire conversation.

People want manufacturing, inventory and accounting solutions that solve their business problems — and that's what we're going to give them. But by "give," I mean "sell."

Effective immediately, we will discontinue the distribution of the free PostBooks® Edition.

All commercial customers and partners will still have access to the full source code, and we will continue to actively solicit and incorporate your enhancements to the product. But no more free PostBooks®. In the old days, there would likely be cries of outrage from the open source revolutionaries (despite the fact that we own 100% of our code, and can license it however we choose). Today, however, I expect people's attentions are more usefully engaged.

There's more. We've also been hearing that all the different Editions (PostBooks®, Distribution, Manufacturing, Enterprise, various add-on packages) are confusing. We agree. That's why going forward, we're going to focus our energies on one core product — xTuple ERP, which will incorporate all the advanced features that will enable companies to grow with our software, but at a significantly lower price point.

More in the days and weeks to come...

So where does this leave companies currently running PostBooks®?

For the past several years, of course, we've required a license key (free for companies with under five concurrent users) in order for PostBooks® to function. All companies with currently active PostBooks® license keys will be eligible for a crazy good deal (ends September 30, 2019).

Thank you for working with us, as we take these steps to make xTuple (the software and the company) better and delivering more value than ever, with a renewed focus on the success of our customers.

Ned Lilly, xTuple President and CEO