Start-up harvests customer code

The Norfolk, Va.-based company built a line of packaged applications for small and mid-size manufacturers. The applications are built using open-source products, notably the PostgreSQL database and Trolltech's Qt development framework.

On Monday, the company announced version 1.3 of its ERP suite, which added credit card processing, a financial reporting tool, and integration with package delivery services.

Using freely available software has allowed OpenMFG to undercut rival products on price, said Ned Lilly, CEO of the five-year-old company. Prices for OpenMFG installations, including services, have been about $50,000, he said Friday.

The company has also employed elements of an open-source business model, one that a growing number of smaller software firms are adopting to better compete with entrenched companies.

OpenMFG provided clients with its applications' source code, as most open-source companies do, to allow customers and resellers to customize the package more easily than if using an application's published programming interfaces, Lilly said.

In return for providing the source code to customers and partners, OpenMFG requires those changes be returned to the company, another common open-source licensing technique. That process ensures that customers' modifications are supported by the vendor and OpenMFG benefits from the work of outside developers, Lilly said.

Lilly said none of its 30 customers or resellers has voiced any concerns with the practice.

The process has been more complicated than if OpenMFG code was created only by internal staff. Lilly said the company has managed the arrangement by running its internal development process like an open-source project.

"That's what you have to do in distributed software development. It's what any open-source project worth their salt figures out how to do," he said.