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Open-Source ERP Makes Headway in U.S. Market

An open-source business-application vendor is ramping up its U.S. partner push as it seeks small to midsized customers. In February, Perot Systems launched a Clinical Solutions Center to centralize its clinical resources and project management methodologies in one organization. In the following months, Perot Systems appointed Dr. Kevin Fickenscher to the newly created post of […]

Written By: John Moore

May 4, 2005

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An open-source business-application vendor is ramping up its U.S. partner push as it seeks small to midsized customers.

In February, Perot Systems launched a Clinical Solutions Center to centralize its clinical resources and project management methodologies in one organization. In the following months, Perot Systems appointed Dr. Kevin Fickenscher to the newly created post of executive vice president of clinical transformation.

Health care of late has become a vertical market of interest to integrators. Accenture and IBMboth have made acquisitions in this field in recent weeks.

Perot’s government services line of business didn’t fare as well, with revenue declining 3 percent in the first quarter. The company attributed the decline to delays in government contract award decisions.

MindTree Seeks Expansion

MindTree Consultinghas big plans for the next 12 months, with goals that include organic growth of 60 percent and revenue of $85 million to $90 million for its 2005-06 fiscal year, which began April 1.

MindTree, whose main offices are in Bangalore, India, and Somerset, N.J., provides a mix of IT R&D (research and development) services. The company, which closed its 2004-05 fiscal year with $55 million in revenue, lacks the size of its Indian technology services counterparts. Wipro,for example, finished its fiscal year ended March 31 with $1.87 billion in revenue.

But MindTree emphasizes greater customer attention and access as it grows into a midtier player, said Joseph King, senior vice president of sales and marketing at MindTree.

That philosophy apparently has won over some customers. Volvo, when it decided to offshore work to India, selected MindTree over its much larger rivals.

“They told us they would rather get an ‘A’ team from MindTree than a ‘C’ team from a larger company,” King said. He said he has found that companies looking to offshore have opened their preferred vendor lists to include midsized companies such as MindTree.

MindTree, which will hit its six-year mark in August, was launched simultaneously “in both ends of the world,” King said, contrasting MindTree with companies that started in the United States or India and later expanded overseas.

The company derives 70 percent of its business from IT services—applications development, maintenance and the like. The latter category, King said, has become particularly active as customers seek to outsource the maintenance of legacy applications, while their internal IT teams focus on developing new technology.

The remaining 30 percent of MindTree’s business comes from its R&D services. Here, the company develops custom software, which it licenses to companies that embed the software in their products. Areas of development include wireless technology, VOIP (voice over IP) and SANs (storage area networks). Sony and Fujitsu are among the company’s R&D customers.

Some of the larger Indian services companies also provide R&D services. But there’s one area where MindTree won’t be competing: business-process outsourcing. King noted the “growing pains” of BPO vendors, which struggle with high turnover. “We don’t think that is the space for us to be in,” he added.

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Open-Source ERP Makes Headway in U.S. Market

John Moore

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