CRM Shakeout, or the End of Salesforce?

By Renee Boucher Ferguson  |  Posted 2008-02-08 Print this article Print

Q: Do you think there will be a shakeout of the CRM platforms?

A: On the platform side, we've always believed that the customer is in control and let's not hide behind artificial restrictions as the reason for calling it a platform. But the reality is there's only so much you can customize - that's the reason for calling a platform a platform.


But the reality is there's only so much you can customize; you can only customize what [the vendor] says you can customize. Our perspective is the platform is something you should be able to do with anything that you want. Ultimately for us it's about facts. It's about let's put Sugar 5.0 or Oracle or let someone who understands platforms and it will be night and day between what's a real platform and what's marketing.

Q: What is SugarCRM's road map for the coming year?

A: This year, 5.0 was a major release of the Sugar open-source community. It's huge for us last year with adopting GPL v.3. We're also at a point where we're investing not only in our own on-demand [capabilities] but our partners on-demand. We don't believe we should be the only Sugar On Demand out there. We're investing in global on-demand working in 6.0. It will probably ship in the fourth-quarter time frame.


Those are the big key things. You're also seeing our deployment sizes getting larger and larger, so we'll be doing some announcements on multi-thousand deployments. A lot of folks like to pretend we're just in SMB [small and midsized businesses], so we'll be announcing multi-thousand deployment deals, which will completely end the debate of scalability or maturation of SugarCRM and commercial open source in general.


I do think there is a shift this year we are starting to see. The business models are shifting. The lock-in base for on-demand models are kind of at high point . More and more people are really questioning why is there only one way to do something, and I am an idiot if I am not thinking that there is only one way? Sometimes onsite makes a lot of sense. Sometimes on-demand makes a lot of sense. It's amazing that vendors say there is only one way to do something. There are multiple ways of doing things.


Now we're seeing that more modern architectures like Lamp running on site are so much more effective. So we're seeing that technology is eating into the castles of proprietary on-demand. I'd say that's how we're seeing it. That's what we believe is reality.

Q: Who do you consider your competition?

A: We have some unique competitors, but we run an Oracle database. Microsoft is a competitor, but we run on MS SQL Server. In some ways it's legitimate co-opetition. I put Microsoft in that category. We compete but we're friends and partners in other respects. Our developer conference is a good example; Microsoft and Oracle are sponsoring it. That shows good spirit.


On the other hand, there's Salesforce. I think that 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. And it has some exciting advantages over the system they've been running over the last couple of years, which is OK but does not help achieve real objectives.

Q: What's the next evolutionary step for CRM ?

A: From our standpoint, in the old days, pre-SugarCRM, the thought was -we live in Silicon Valley , we're smarter than the rest of the world, we build it, you buy it.'

That's changed. You're looking at fundamental business problems that every business shares: running an effective sales force. Managing a customer base. Giving management effective tools. Those are key issues that will never go away. Because of that CRM as a software category will never go away. There are some exciting developments that are going to make CRM exciting - mash-ups like Google with Open Social.

Standards are maturing, but we'll see by the end of the year, with standards like Open Social, and advances of intelligence within the devices we are using, the sheer power of our laptops, and always-on connectivity that it all really is creating a new renaissance of CRM capabilities.


All the work that's been done on the B2C layer is really starting to hit B2B. Traditional, ultra-serious boring applications are becoming very dynamic. These are the biggest shifts in years.


I see it all converging this year...there is collective intelligence around the world, where people are willing to share ideas on something that is maybe not so interesting as a trouble ticket, but the fact is there might be 300 people interested in sharing information on a trouble ticket. Because real innovation really comes from people sharing innovation. That's really exciting. It is the beginning of a new renaissance. The proprietary guys won't survive it. The engineering outlook is changing.

Q: What does SugarCRM need to go forward, to capitalize on this emerging world?

A: It's really just being open. SugarCRM is the first enterprise-applications company to write an open-source license - it's such a large, powerful enterprise application that we've done over the last four years. We definitely took a new road. As a result, four years later, it's proven to be the right thing.


Being open, rejecting the artificial lock-in, most companies are afraid to move away from that. That's what they base revenue on. If you're going to base revenue on that you have to be able to create something that is open - [to show] what are the features, how expressive [are your tools] how open are you at the global level. Are you willing to GPL your work at a global level? We're seeing that we can do well and good at the same time.


That's the lesson we've learned. We can stay true to our mission - staying open and putting customers in control. We're doing very well economically and we're really pleased with our [success]. For us, it's continuing to be focused.





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