This IDC study examines the current state of open source adoption from a demand side as well as a supply side perspective. The demand side analysis presents the results of a recent IDC survey of 515 European organizations' attitudes to and usage of open source software. The supply side analysis is based on analysis of five vendors of open source enterprise applications in Europe: Compiere, Openbravo, xTuple, SugarCRM, and vtiger. Finally, the study examines future market implications of open source enterprise applications and provides advice the vendor community.

"Open source enterprise application vendors are currently changing gears from start-up mode to market expansion mode. The survey results show that open source adoption in ERP and CRM has reached a critical threshold and should now make a 'bleep' on every vendor's radar screen, particularly for those that compete in the midmarket. Several open source vendors have attracted equity investments and industry veterans, and IDC expects a new cost squeeze to hit the enterprise applications market sooner rather than later," said Bo Lykkegaard, research director, European Enterprise Applications and Services, IDC.