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They Are Laughing, But Not For Much Longer
Open-source applications require customization and development work, just like off-the-shelf solutions. Open-source's advantage is that that work is cheaper and easier.
Matt Asay offers some perspective on the evolution of leading open-source applications:
Open source applications? We're at the point the ignorance is breeding laughter. SugarCRM, Alfresco, JasperSoft, Plone, Compiere, etc. These are all applications that used to be ignored, but ignorance is no longer serving proprietary competitors well.
As a case in point, InformationWeek just ran a story on Boise Cascade's use of Alfresco for invoice management. Big customer, big need, big value.
Documentum's response? Completely off-base, ill-founded commentary ("Boise's need to cobble together links between Alfresco and MySQL is one reason some parties turn to commercial document management systems") that open source solutions require development, and off-the-shelf proprietary software requires none. Not only is this not true, but it also cleverly hides a ball that every IT buyer already knows: EVERY ERP/CRM/ECM solution requires customization/development.
Let's not try to obscure the issue for IT buyers. Customization is standard. The question is how much a buyer needs to pay for a vendor to deliver the 20-80% of a products features they won't actually use. Open source (well done) offers a granular way to tailor software to an enterprise's needs. Do creative, development-minded enterprises benefit more from open source today than more passive consumers of technology? Probably.
