SugarCRM: Combining Open Source Sensibilities With Commercial Interest

Henning Ogberg and Jennifer Stagnaro from SugarCRM explains how open source platforms can be a good source of revenue

SugarCRM is a developer of open source Customer Relationship Management (CRM) software based in Cupertino, California. The company’s revenue grew 75 percent over the last financial year, with a lot of this success due to demand from the European market.

The Sugar platform is created by a network of 30,000 developers, and used by at least 1.5 million people around the world. The company offers both a free community edition of the software, Sugar CE, along with three different commercial versions.

TechWeek had a chance to talk to two SugarCRM executives – SVP of Marketing Jennifer Stagnaro and SVP for EMEA Henning Ogberg – to find out more about the way company keeps balance between commercial interest and open source philosophy, and the future of Sugar CE.

Open $ource

mobile_combinedSugarCRM will be celebrating its 10th birthday later this year. The most recent version of the application, Sugar 7, was launched in November 2013 and introduced the choice to either run on-premises, or in the cloud. “Previous CRM systems were focused on delivering pipeline management and forecasting tools to the executives, so they could have visibility into their business. What we found was a lot of CRM adoption fell short because frankly, sales people hated using these applications,” tells us Stagnaro.

“Sugar 7’s release is all about making sure that we are giving value to each individual customer who interacts with the system, and as a by-product, management gets visibility into their business that they need.”

However, unlike with previous releases, SugarCRM didn’t offer a simultaneous update for Sugar CE. Stagnaro explained that the company made the decision to continue using Sugar 6 as the basis for the free community edition in order to “help develop the core level of the product”. This means that anyone is free to run the software with basic functionality, but customers would have to pay in order to use premium features such as the new Sugar UX interface.

The company will continue providing support for Sugar CE. Meanwhile, one of SugarCRM’s partners, SalesAgility, has forked the version 6.5 code and is marketing it under the name SuiteCRM.

Sugar is not worried that these changes will result in developers leaving the platform – as unlike some other open source projects, the community around Sugar is actually focused on ways to make money with the commercial edition.

At the same time, thanks to its open nature, the platform can be integrated into any existing application. “I think that is the real power of open source – companies can fit our system into their strategy, rather than adopt a strategy that the vendor told them would work with the system,” says Ogberg. “With Sugar 7, we allow our product to sit on-premise behind a firewall, we allow it to be hosted in the public cloud just like a SalesForce solution, a private cloud, or a hybrid of the two.”

Ogberg also notes that the recent revelations about data collection practices employed by the GCHQ and the US National Security Agency have highlighted the need to offer a variety of hosting scenarios, and Sugar 7 takes advantage of this trend.

Across Europe, most SugarCRM customers are located in the UK and Germany. Ogberg says he also sees a lot of growth in Italy and Spain, as the markets mature and embrace the modern CRM solutions. “We see a lot of movement from existing CRM customers, who are adopting products like Sugar because of the high cost of the systems that don’t really provide the value they are looking for.”

“Our CEO Larry Augustin has stated many times that he believes that Sugar has the potential to be a very large company, and that, I think, has to include an IPO at some point in time. But we’re not too stressed about getting there.”

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