Selling GPL software as a Service


Vendors of the largest ERP Accounting systems have been selling them for several years as services over IP networks, instead of requiring customers to purchase, install, and maintain on their own servers. There is very big money in selling ERP over internet and VPNs-- look at the pricing for some of Oracle Business Online, SAP or other Corio services. whew. $500/month per workstation....

Citrix, a single-product company, sells the "PC Anywhere" technology that enabled most of the ERP remote access until Microsoft took back the business on Windows Terminal Server Edition. Their 3-year sales and profit growth was 186% and 74% annually, driving their market cap to nearly $4 billion until Mickey decided to harvest that particular market which is what they always do, sooner or later.

For a while after ASPs began selling ERP accounting systems over the internet or VPN connections, the absence of midrange accounting software sold as a service on ASPs was rather conspicuous. The midrange vendors have been telling us how innovative they are, but the enterprise vendors were way ahead this time. See the directory on for listings of hundreds of high-powered service providers.  Lately of course Lawson, Sage, Great Plains, etc.turning up on ASPs as they revise their ridiculously expensive licenses and improve their web modules...

There is no technical difficulty running midrange and consumer accounting packages over Citrix. These would suit small business better than SAP anyway. But they really don't want to offer licensing terms that enable ASPs to offer seats for rent. They want the whole dollar for seat licenses or copies of the software irregardless of whether it is installed locally or on a remote host.  They want the entire customer relationship and VAR channel. Only the high end is seeing any competition in this aspect of their licensing terms or costs.

Midrange and consumer Accounting Software vendors will eventually want to license their stuff to ASPs for service over the internet, or risk eroding their customer base. (if they don't cannibalize their own customers then someone else will)

The free software movement has spawned a number of accounting programs which, although difficult to compile and install, are growing more and more attractive. In the hands of skilled administrators, they may provide good back ends for distributed accounting systems:

Expect these online accounting services to be inferior to consumer software at first. Early customers will be signing up to get access to additional services available from the ISP or outside vendors.

Online systems will achieve excellent uptime performance. Software will not require millions of lines of error trapping and error corrections to grope for every hardware and software condition that exists on the PC.  Webledger code can be maintained continuously, since the engineers and developers are right next to the equipment and the feedback of numerous users is concentrated at one location in real time. The feedback topology is very favorable since the engineers can monitor or inspect  sessions, communicate directly with the user's workstation with chat, or telephone, etc.

Since the costs and complexity of accounting dialtone service will be manageable, ISPs and entrepreneurs will begin selling G/L dialtone with whatever back end or vertical market addons they are comfortable with.

Microsoft NT developers will find numerous 32-bit accounting systems suitable for backends. Linux users will find Linux-Kontor. This is a large-scale, 3-tier, Client/Server ERP accounting system written in Java classes and released under the LGPL open source licensing. The Architecture uses RMI between a client and server, and the client GUI is Java AWT. The open source accounting platforms are quite active recently and I no longer summarize them on this page, since I would be out of date in a few months.  See links at

The Free Software Foundation has confirmed that there is nothing in the GPL license restricting anybody from charging access fees to a server running GPL software. Is this a business opportunity or what?

* Todd F. Boyle CPA
* International Accounting Services LLC
* 9745-128th Av NE, Kirkland WA 98033 (425) 827-3107