SugarCRM last week released an upgrade to its open source CRM system, a software package SugarCRM’s founders say they hope will woo customers that would otherwise turn to more expensive commercial CRM offerings.
Sugar Suite 3.0 represents a significant advance for the young product, which publicly launched last September. The forthcoming update adds campaign management, e-mail marketing and forecasting components to the suite, along with tools for broader back-office administration such as project management and an employee directory.
SugarCRM was founded in April 2004 by a group of developers that had worked together at CRM maker Epiphany. Frustrated by what they saw as the inefficiency of the commercial software development process, the Cupertino, Calif., company’s creators say they felt an open source model could build both better software and the foundation for a viable business, says John Roberts, CEO of SugarCRM. The company is backed by close to $8 million in venture capital funding from Draper Fisher Jurvetson and Walden International.
The software’s development home is SugarForge.org, where the source code can be downloaded for free. A commercial version, Sugar Professional, includes customer support and additional extensions, such as improved reporting and data security features. Pricing for Sugar Professional starts at $239 per user, per year,and drops with volume licensing. A hosted version is available for $40 per user, per month.
Athenahealth CTO Bob Gatewood is in the process of replacing several hundred Salesforce.com licenses in his organization with SugarCRM deployments. The privately held Waltham, Mass., healthcare practice management firm has used Salesforce.com for four years, in which time Gatewood says the firm grew from $2 million to $60 million per year in annual revenue.
“We’ve gotten to a size where we need more control and tighter integration with our internal systems,” he says. “We love open source, and we have a sizable development team already. This was really about getting the code.”
Gatewood’s group has extensively modified SugarCRM to suit its needs and later this month will be going live with its deployment. Eventually, Gatewood says he expects SugarCRM to roll out to 200 Athenahealth employees, cutting the organization’s Salesforce.com licenses from 300 to 100. The move will reduce Athenahealth’s software licensing costs, but that wasn’t the primary motivation, Gatewood says.
“We have some customer case routing issues. The call center is able to resolve 85% of the calls, but the ones they need help with they have to send off to a subject matter expert. Salesforce.com’s data structure doesn’t make it easy for us to track it when that happens,” Gatewood says. “With Sugar, all that stuff is transparent now. We could get in and change the code.”
SugarCRM’s customer base is a small fraction of that of major CRM vendors. SugarCRM has logged 150,000 downloads and sold licenses to 200 organizations, Roberts says. The company is only lightly covered by analysts; in a recent report, Gartner listed SugarCRM among a pack of companies offering commoditized sales management tools suitable for “small, simple organizations.”
Still, plenty of organizations don’t need more than basic CRM features. “What percentage of the features do you actually use in Microsoft Word?” asks Pride Industries CFO Tim Yamauchi, who picked SugarCRM for use in his 3,000-employee nonprofit company in Roseville, Calif.
Pride employs disabled workers to provide a variety of outsourced maintenance and administrative services. Yamauchi had used a variety of CRM systems in previous jobs and wasn’t overly impressed by any of them. Pride uses a number of open source applications, and when its IT team brought SugarCRM to Yamauchi’s attention, he was impressed by both the technology and the ethos of SugarCRM’s executives.
“They’re a young, entrepreneurial company, and they’ve been great to work with,” Yamauchi says. When he requested features that would push out sales and marketing reports by e-mail, SugarCRM’s developers provided it.
Cowley is a correspondent with the IDG News Service.
