What's the Deal with Licensing

Going Odoo Episode 2

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Introduction

Of all the topics I get asked about, licensing stands out as the most common, and the one surrounded with the most misconceptions. And it's not hard to see why, open source and enterprise don't usually mix. So today I want to take some time to explore what the licensing model is and what that means to your business.

Humble Beginnings

Odoo began its life as free and open source software. But beginning with Odoo 9, they were putting so much into developing the product that an open source model couldn't be sustained. So they decided to split the product in two, continuing to offer a free version with Odoo Community Edition, and adding a premium subscription with Odoo Enterprise Edition. The effect of this has been to dramatically increase the speed at which the product can grow, there's no way they could of had the number of features they do without this shift.

The Current Landscape

Looking at it today, Odoo community houses over 80% of the functionality, including nearly all of the big names: sales, purchasing, inventory, e-commerce, manufacturing. While there's some features for each of these that are exclusive to enterprise, they are all still extremely powerful in community. The exception here is the accounting module. In recent versions, Odoo has decided to hide many of the accounting functions from users and claimed it was only in the Enterprise edition. This is a little bit of a stretch, the core accounting functionality still lays in the community edition, but many of the features that make it usable such as bank feeds and financial reports are locked away in enterprise.

As for the 20% of enterprise only code, this is split between two areas. The first half is a number of standalone apps. These are new features such as e-signatures, field services and social media marketing. The other half is made up of improvements to the community code. This includes usability features like a mobile friendly back end as well as improvements to community apps such as the bank feeds I mentioned earlier.

The License

To get these features, you need to an Odoo enterprise license, in which you will pay a monthly fee for each app, and for each employee. The price of these vary country to country, but in Australia most of these range from US$12 to US$48 per app per month and US$25 per user per month. This fee covers not only your use of the apps, but your covers migration of your data between versions.

To find out what this would cost you, be sure to check out Odoo's pricing page. You'll be able to select which apps you would like and number of users, and it will let you know exactly what your costs will be.

These fees are just for the enterprise licensing of the software and hosting fees if you are using Odoo online, and are paid directly to Odoo. It doesn't include any hosting fees self hosted versions, any Odoo success packs you'd like, or any fees that you might be charged by an Odoo partner for implementation or development. While we do get a small amount of commission as partners, it really just offsets our partnership fees, so if you go with a partner you'll get a bill completely separately from this.

What Defines Community vs. Enterprise

Since Odoo first did the split, they have been trying to better define what is part of enterprise, and what is community. Their stance is if it is a general app that a large number of people would use and would draw in a large number of users, it goes in community, while specialised apps that are designed for a more niche market will be added to enterprise in the hopes of converting them into paying customers.

The Catch

What catches a lot of people out is that every app that includes enterprise improvements must be paid for once you move to enterprise, there's no longer an option to use the free version. So even though you can use a majority of the sale app in the community version, as soon as you start using any enterprise app,you will need to pay an enterprise subscription to the sales app, even if you aren't using any of the enterprise improvements to that sales app.

This leads to some interesting scenarios.

Say you run your ecommerce business with Odoo community.

So at a minimum you'd have ecommerce, inventory and accounting. And lets say you have 15 staff. So far, everything is free for you. Barring your own expenses of hosting and domain names. But not a cent goes to Odoo.

But the moment you want say social media marketing, you will need an enterprise license. But this license won't just be the US$36 a month for social media marketing, you'll now be paying for all of that functionality you were previously using for free. Ecommerce, inventory and accounting, all now cost you US$12-36 per app per month, and each of those 15 employees now cost US$25 a month too. Suddenly, a single app starts costing you a little over US$5,000 a year.

This is a worst case scenario, it's incredibly rare. Every business I've worked with either uses multiple enterprise only apps or requires some of the enterprise improvements to community apps. but it helps to highlight the structure of the licensing system.

Conclusion

At the end of the day, US$5,000 a year is still a good deal for the sheer amount of functionality that Odoo can provide, especially if you take the time to make it work for your business. But as always, this depends on your business, and how committed you are to making change.

Hopefully this has cleared things up about licensing in Odoo, and be sure to head on over to the Odoo pricing page to get an idea of what your Odoo licensing fees will be.