Unit 4: From TinyERP to Odoo - Free software reaches the ERP

A Belgian with an idea

In 2005, a young Belgian engineer named Fabien Pinckaers launched TinyERP. The idea was at once simple and ambitious: to build a complete, open source enterprise resource planning (ERP) system. Software that would do what SAP or Oracle did -manage accounting, inventory, sales, purchasing, human resources- but that would be free, accessible to any company, regardless of its size or its budget.

Pinckaers had been programming since he was 13. Before TinyERP, he had set up a small business selling auction software. He knew what it was like to be an entrepreneur with limited resources, and he knew how frustrating it was for an SME to face the astronomical licences of proprietary ERPs. TinyERP was born on the premise that business management should not be a privilege of large corporations.

From TinyERP to OpenERP

In 2008, TinyERP changed its name to OpenERP, reflecting a greater ambition. It was no longer a "tiny" project; it was an open ERP that aspired to compete with the big players. The community of developers and partners began to grow. The first companies offering implementation and support services appeared, creating an economic ecosystem around free software.

In 2010 came a funding round of 3 million euros from funds such as Sofinnova Partners, which allowed OpenERP to professionalise, hire a team and open international offices. The project was ceasing to be an experiment and becoming a genuine alternative to proprietary software.

The OCA: the community organises itself

In 2013 something fundamental happened: the OCA, the Odoo Community Association, was founded in Switzerland. The OCA is a non-profit organisation that brings together developers, functional consultants, integrators and end users who work together to build and maintain quality modules for Odoo, following the principles of free software.

The OCA operates on a governance model they call do-ocracy: those who do, decide. Every code contribution goes through a process of peer review and automated tests before being accepted. There is no dictator who decides what is included and what is not; it is the community that assesses the quality of each contribution.

The OCA's numbers today are impressive: 258 repositories on GitHub, more than 1,500 active contributors from more than 50 countries, and close to 3,000 modules available for Odoo 16 alone. It is one of the most active free enterprise software communities in the world.

The big change: Community and Enterprise

In 2014 came the most controversial change in the history of the project. OpenERP was renamed Odoo, and with the change of name came a new strategy: there would be two versions. Odoo Community Edition (CE), published under the LGPL licence and completely free. And Odoo Enterprise, proprietary and paid, which would include exclusive features such as advanced accounting, Odoo Studio, electronic signatures, IoT and others.

This decision generated tension in the community. For some, it was a betrayal of the principles of free software: the most attractive features were being reserved for the paid version. For others, it was a sustainable model that made it possible to fund the continuous development of the product.

But the community responded in the way free software communities always respond: by building. The OCA and its contributors created free alternatives for many of the features exclusive to Enterprise:

• account_financial_report: complete financial reports (Balance Sheet, Profit and Loss, Trial Balance) that rival those of Enterprise.
• mrp_multi_level: multi-level material requirements planning for manufacturing.
• quality_control_oca: quality control on the shop floor.
• web_responsive: interface adapted to mobile devices.

And so, dozens more modules covering areas such as CRM, project management, warehouse logistics and fiscal localisation for dozens of countries.

Why this matters for your company

This is where history stops being history and becomes something that directly affects your bottom line.

Odoo Enterprise currently has a starting price of around 24.90 euros per user per month for the standard plan, with higher plans reaching 37.40 euros. For an SME with 15 users, this amounts to between 4,500 and 6,700 euros a year in licences alone, not counting implementation or support. And that figure grows every time you hire a new employee who needs access to the system.

Odoo Community Edition with OCA modules costs zero euros in licences. Zero. Not per user, not per month, no asterisks and no small print. Zero.

But the saving on licences, important though it is, is not even the main advantage. The truly strategic advantages are others:

No vendor lock-in. If your current technical provider does not satisfy you, you can switch to another without losing your software, your configurations or your data. With proprietary software, changing provider often means changing software, migrating data, retraining your team and starting from scratch.

Your data is yours. With Odoo Community you have full access to your PostgreSQL database. You can export, analyse, audit and move your data whenever you want, however you want. You do not depend on the goodwill of any provider.

Global support community. If your usual consultant closes down, if the company that implemented Odoo for you disappears, there are thousands of professionals all over the world who know the code, who can carry on where others left off. Your business does not depend on the survival of a single company.

Total transparency. The source code is right there, open, for anyone to audit. There are no black boxes, no hidden features, no surprises. You know exactly what your software does because you can read it.

Let us think of a concrete example. An installations company with 10 users needs accounting, project management, inventory and CRM. With Odoo Enterprise, it would pay between 3,000 and 4,500 euros a year in licences. Over five years, that is between 15,000 and 22,500 euros. With Odoo Community and OCA modules, that money can be invested in customisation, in training, in improving internal processes. In things that generate real value for the business instead of feeding a recurring licence.