Open source technologies have emerged as a serious threat to proprietary software owing to their free to use nature. The popularity of open source technologies has forced companies selling proprietary software to roll out cheaper versions of their software. It has also forced these companies to innovate and add value to their existing range of software products.
Open Source Technologies when used to develop ERP systems have the potential to drastically reduce the marketing, distribution and sales costs of organizations selling ERP software. Existing proprietary ERP systems are too costly to install and require a lot of customization to suit the specific requirements of an enterprise. Open source softwares allow the source code to be modified by users in line with the changing dynamics of the market. Proprietary systems, on the other hand, do not give such freedom to users and for every modification; users have to depend on the vendor. This proves to be a costly exercise but since proprietary systems are slightly more secure than open source systems; organizations that are paranoid about security usually opt for the former.
Open source technologies are an ideal way for companies to execute internal projects at the lowest cost. If the applications that need to be developed do not have a bearing on customer satisfaction then the sensible way to develop them would be to use open source technologies. However, customer facing websites and applications would require the support of a vendor if the applications have been built using open source technologies.
By exerting a downward pressure on price, open source alternatives indirectly help in improving the PC penetration in developing countries as more number of people are able to take advantage of software systems to improve their daily lives. Open source technologies also help companies to reduce the cost of setting up and maintaining their telecom infrastructure. Open Source Technologies have helped students, amateurs, professionals and those in the SOHO segment of the market to build applications without bothering about software and licensing costs.
Open source technologies have helped immensely in the promotion of e-learning technologies. Being free to use they have helped in lowering the cost of delivery and therefore helped a larger section of the audience to take advantage of open source technologies. Shopping cart solutions built on the open source platform have helped companies to set up and maintain online storefronts at very low costs. Easy availability of shopping cart solutions has helped in the development of an internet economy.