SugarCRM Launches a New Version, With On-Demand and Turnkey Service Options

SugarCRM, a software developer founded earlier this year by three E.piphany veterans, has launched version 2.0 of its namesake CRM application. The Web-based program currently focuses on sales functionality for smaller companies, and in this release adds expanded quoting and price-list capabilities, improved hardcopy proposal generation, and team selling functionality. Launching without any venture capital, SugarCRM's founders turned to the open-source development model to fuel the company's initial growth. Although it claims 20 developers working on the project, the company's entire staff is currently less than half that, as contributions come in from outsiders on the product's open-source project page. "We saw the rise of commercial open-source companies and fundamentally different business models, who are able to take on huge companies and basically destroy their revenue streams," says John Roberts, SugarCRM cofounder and CEO. As technologies like Linux, MySQL, and JBoss have shaken up enterprise IT, Roberts hopes to replicate that success in the front office, where open-source technologies like Mozilla and OpenOffice.org have so far enjoyed less success than their pay-for-play counterparts. Roberts says he is simply staying ahead of the technology curve. "CRM has always been very susceptible to shifts. We moved from client/server to renting with Salesforce.com, and I saw open source as another shift." SugarCRM does not simply give away everything: The underlying browser-based sales functionality is available as a free--and freely redistributable--download for all comers, and more than 50,000 downloads have been logged since the product went live. As the software is designed from the ground up around freely redistributable open-source programs, a SugarCRM server can be entirely assembled for zero software cost. However, the company sells additional capabilities, including team-selling collaboration, as part of the SugarCRM Professional product, a perpetual-license version with subscription customer support, much like a conventional enterprise application. New revenue streams include an On-Demand version of the product (to be launched next week), and complete hardware and software server packages, identical to the configurations used in the company's hosting center, which will be sold directly to companies under the Sugar Cube moniker. SugarCRM hopes that the allure of experimenting with an open-source application--the Professional version, while not free, still discloses all its code for customization purposes--will replace the splashy advertising and sales stunts other CRM startups have employed. "We don't have plans to grow and become a thousand-employee company and hire a huge sales force. Those days are over," Roberts says. "Our open source product is our marketing." Related articles: CRM Vendors Embrace Open Source CRM CRM's Future: Open Source? Does CRM Work on Linux?