xTuple Looks to Expand into New Markets

In eight years of existence, xTuple, the Norfolk, Va.–based provider of open-source software, has primarily served just one vertical: manufacturing. In an effort to further expand its focus beyond those confines, the company has now, in its 11th iteration of xTuple ERP, introduced CRM functionality. The new release is being called xTuple ERP version 3.2.

According to Ned Lilly, the company's president and chief executive officer, in the last 18 months the company has decided to expand its focus in two important ways:

1. For starters, xTuple has carved off an entry-level version of its product -- known as the PostBooks Edition -- that is completely free and open-source. The product, Lilly says, has been downloaded more than 200,000 times on Sourceforge.net.
2. The company has also been rebranding its three offerings -- PostBooks, Standard, and OpenMFG -- under the xTuple name. "Primarily, we've done this because people are coming to us that aren't necessarily manufacturers, but like our software and [the] approach that we're taking with this," Lilly says.

With the latest version, xTuple has added major usability improvements to the suite's CRM module, including graphical calendars of to-do items, email and alarm notification of system events, an event management system, more-sophisticated business intelligence and analytical tools, and an improved user interface. Many of these efforts, Lilly explains, are part of an attempt to delve deeper into CRM. "As we were getting started, our CRM [capabilities] were limited to basic sales and customer history," he recalls. "As we've gotten more into it, we've fleshed out our definition quite a bit. The ‘C' for us stands for 'corporate,' not just 'customers.' "

Lilly says none of the additional features would have been possible without dialogue from the company's open-source community. "The new functionality was largely sponsored by individual customers," he says. "In a couple of cases, they actually wrote some of the code and submitted it back.... In most [situations], it goes into all three of our versions."

The most interesting feature in release 3.2, according to Lilly, is the fully integrated copy of Qt Designer, a graphical developer tool that assists a form- and screen-building application included with the Qt suite of cross-platform C++ programmer tools. It provides the ability to create new screens and edit existing ones without requiring a separate development environment. "People can load up, modify, and create new screens within their system without having to be a programmer," he says.

Jim Shepherd, senior vice president of research at Boston-based analyst firm AMR Research, says that he believes that xTuple ERP 3.2 represents a continued development for the company. "The functionality gets richer and richer, which broadens the potential market for [the company]," he says. "It can go upmarket into larger businesses it wouldn't have been able to address before...also stretching into additional vertical industries."

Despite a clear open-source heritage, xTuple doesn't view itself as competing directly with other players in the sapce, such as Compiere or SugarCRM. Lilly says he views as his primary competition other midmarket players such as Microsoft's Dynamics offering and SAP's Business One. "It's a very unconsolidated market," Lilly says. "That's what we see as the greenfield here...the small-to-midsize business space."   

Shepherd echoes Lilly's assessment, saying that the company is making positive headway into the ERP market, which he describes as formidable. "xTuple has been walking a line," Shepherd says. "It certainly wants to continue to maintain the differentiation of being open source, but it also wants to be accepted as a mainstream ERP vendor. There's still stigma attached to open source -- that somehow it's not quite [at] the level of richness and sophistication as commercial software."

In xTuple's case, Shepherd says, the road less traveled might just pay off: "The company's doing a good job in the way it's packaging its offerings and marketing itself."

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