Enterprise resource planning (ERP) software is the goliath of the software industry, encompassing in its scope the financial and sometimes physical operations of a company.

Many smaller companies don't bother with full ERP (define) applications due to their complexity; it's a situation that xTuple President and CEO Ned Lilly is trying to fix.

Until this week, xTuple was known by the name of its flagship commercial product OpenMFG, which is an ERP application geared for manufacturing. Lilly and his team are now expanding the scope of ERP with a new open source-style offering called PostBooks, which is based on a similar code base as OpenMFG.

"The difference between PostBooks and the commercial OpenMFG product will be high-end stuff. Maybe on the order of 15 or 20 percent of the high-end functionality," Lilly explained. "It's not just a carve-off project. We will continue to run them in parallel and enhancements and contributions to one will feed the other."

The other big difference is that Lilly claims that PostBooks is open source. PostBooks is being offering under the new XTPL (xTuple Public License), which is the Mozilla Public License plus attribution.

Technically, the license is not approved by the Open Source Initiative (OSI) and as such there are some who would argue that PostBooks is not Open Source. The OSI has recently added a Common Public Attribution License, which is similar to what XTPL is trying to achieve, so PostBooks may one day be under an OSI approved license.

Licensing minutiae aside, PostBooks will be run like a traditional open source project on the sourceforge.net repository with external contributions and community participation welcome.

The name PostBooks isn't directly related to Intuit's popular QuickBooks, though there is an indirect meaning. Lilly noted that PostBooks is a 'substantial' step up from QuickBooks in that PostBooks is more than just basic accounting software.

"The name is also certainly intended as a nod to Postgres, our favorite database," Lily said. "It's not intended to be directly competitive with off- the-shelf accounting software but we do see a lot of migration from those packages."

The real competition is likely to be midrange ERPs, such as Microsoft Dynamics and SAP Business One. Other open source solutions, such as OpenBravo and Compiere, aren't really the target.

"I think it's a gigantic global green field here, as the whole notion of open source ERP is embryonic with nothing but opportunity for people with good solutions," Lilly said.

The reason why Lilly thinks that there is so much opportunity is because there are few midmarket ERP vendors. That and the fact that fundamentally the biggest challenge of ERP is that it's ERP.

"ERP by definition is a non-trivial, all-inclusive, all-touching type of application," Lilly said. "It's not something you can download and show the boss in the AM."

With PostBooks, the plan is build and nurture an open source community and make it easier for people to get a handle on ERP.

"There are two problems with ERP, cost and complexity," Lilly said. "We've got a good answer for cost and we've chipped away at complexity but there is more work to be done."