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SugarCRM Review and Evaluation

SugarCRM

By Johann Smetzner, June 2008

 

Cupertino, California-based SugarCRM is one of the more popular commercial open source customer relationship management (CRM) software companies. However, while SugarCRM continues to battle for an open source CRM leadership position, a 2008 published report by Gartner shows that open source CRM software is failing to make inroads and market share for open source CRM offerings will remain below 1 percent through 2008 and likely beyond.

 

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. Using those proceeds, the company looks to double the staff to 300 employees during 2008 and while profitability seems to be a distant dream, the company is said to be testing the waters for a possible IPO (initial public offering) as soon as 2009.

 

SugarCRM made its first release in September 2004. In December 2006, SugarCRM announced it reached the milestone of 1,000 paying customers. At the time of this review, April 2008, the company claimed to have about 3,000 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.

 

The company provides a free open source CRM system as well as a commercial offering in SugarCRM Professional, which includes support and much more functionality. SugarCRM offers multiple software delivery options, including software as a service / on-demand, 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 retains about 125 business partners which sell and support the customer relationship management software. About 20 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 as of 2008. 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 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 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.

 

Upcoming product releases we look forward to reviewing include the Mobile Edge Express and Stack Installers. Mobile Edge Express is a mobile application co-produced by iEnterprises. The on-demand system is designed to permit Blackberry integration with SugarCRM on smart phones. Stack installers for SugarCRM will also enter the market in 2008. They are supposed to make it easier for users to install the Sugar Community Edition which is the most recent version of Sugar's commercial open source CRM system.

 

SugarCRM Update Next Quarter We'll be performing another more detailed SugarCRM software review and updating this page in about one quarter.

  SugarCRM Inc.


10050 North Wolfe Road

SW2-130

Cupertino, California 95014

USA

Telephone: (408) 454-6900

Email: sales@sugarcrm.com

Web: www.sugarcrm.com

 

John Roberts CEO SugarCRM
John Roberts, CEO SugarCRM

 

Prior to co-founding and assuming the leadership role at SugarCRM, Roberts held positions over 14 years with E.piphany Inc, BroadVision, Baan Software and IBM. Roberts has established SugarCRM's commercial open source business model, co-led the product design of SugarCRM products, and helped build the Sugar user community. Roberts retains a BS in Business from the Virginia Commonwealth University