SugarCRM Open Source CRM Software
Cupertino, California-based SugarCRM is the most popular commercial open source customer relationship management (CRM) software company. However, while SugarCRM continues to battle for an open source CRM leadership position, reporting by Gartner suggests that open source CRM software is failing to make inroads and market share for open source CRM offerings will hover around 1 percent of the total CRM software market.
SugarCRM is heavily venture financed. In 2008, the company acquired $20 million in additional financing, led by New Enterprise Associates and joined by existing investors Draper Fisher Jurvetson and Walden International, to reach a total $46 million in venture funding. More recently in 2012, the company acquired another $50M and indicates it will use the proceeds to add staff, grow R&D and increase business development. Despite a cash rich position, profitability seems to be a distant dream for the company. Nonetheless, SugarCRM is said to be testing the waters for a possible IPO (initial public offering) as soon as late 2013.
SugarCRM made its first release in September 2004. In December 2006, SugarCRM announced it reached the milestone of 1,000 paying customers. Some of the company's largest customers include First Federal Bank, Honeywell and Starbucks, although it is unclear whether these customers use Sugar at the enterprise level or smaller departmental levels. Sugar's largest CRM customer is IBM, who licenses over 80,000 subscription users for its global sales force.
As described in our SugarCRM review, the company provides a free open source CRM system as well as commercial offerings such as SugarCRM Professional, which includes support and much more functionality. SugarCRM offers multiple software delivery options, including software as a service (SaaS), on-premise and appliance-based solutions. The open source CRM software product is licensed under GPL v3. Sugar On Demand is only available for the professional and enterprise editions with about 70 percent being delivered onsite and 30 percent delivered on-demand.
The company has about 300 business partners which sell and support the customer relationship management software. About 30 of those business partners host SugarCRM in their own data centers, thereby competing with SugarCRM's own hosting operations. The company boasts a very sizeable community following with its open-source project, including 65,000 members in its open-source community and 12,000 developers using its SugarForce platform. The company claims the results have produced over 570 languages and 470 product extensions to the suite.
The company's challenges include its desire to move up from a small business customer base to the midsize market as well as secure a beachhead into industries such as financial services, insurance, telecom and manufacturing. Larger companies and vertical markets have much greater professional services and customer support requirements than small businesses. The CRM software products for these larger markets also tend to be functionally deeper and more scalable.
The Sugar commercial open source CRM software solution supports multiple databases, including MySQL, Oracle and Microsoft SQL Server. The on-demand CRM software architecture uses a Sugar-created marketing term called Multi-Instance. According to then CEO John Roberts, hosting technology has advanced to where, "Now it’s possible to have a more modern generation called multi-instance – one instance, single-tenant ... We’re not the only ones to do this. It provides complete upgrades, a complete framework, but gives customer their own database and makes backups a million times easier."
SugarCRM competitors include a host of other open source CRM software systems as well as Salesforce.com. According to prior CEO Roberts, "If someone [Salesforce.com] is spending $90 million every three months on marketing and they want to use the platform word every other sentence, that’s fine. But that doesn’t mean it’s a real platform, or a good platform, or it's worth what they want to charge for it. I think that [Salesforce.com] model of building propriety, lock-in [services] is expensive and [customers] are getting very old and inflexible software. There’s a lot of frustration among Salesforce customers. They’re happy there is a new game in town, and a new app in town called Sugar."
SugarCRM competitive advantages include flexible personalized home pages, flexible sales forecasting (with scenario planning and forecasting worksheets), collaboration features such as integrated forums and threaded discussions and the newest feature called Module Builder which facilitates a much easier application development process. We believe SugarCRM disadvantages include a lack of CRM features and functions (relative to commercial on-demand CRM software systems) as well as a company viability concern (what happens when the venture capitalist funding runs out and the company is not able to sustain itself if its not profitable?) Ease of use with SugarCRM is a mixed review. We've spoken with users who find the user interface reasonable and others who find it very hard to use.