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SugarCRM Wants to Open the CRM Door
CRM Acceleration '08: The cofounder and CEO of the open-source CRM pioneer says that the best technology can finally win in this industry -- and that one day SugarCRM "will be a billion-dollar company."
Posted Aug 22, 2008
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NEW YORK -- It may seem a bit backward that companies wouldn’t select a CRM solution based on which technology was best in their eyes. However, that’s exactly what used to happen -- until now, argued John Roberts, cofounder and chief executive officer of Cupertino, Calif.-based SugarCRM, a provider of commercial open-source applications and services, at his company’s second-annual CRM Acceleration event yesterday at the The Westin New York, in the heart of Times Square.

Speaking to a crowd of current and prospective partners and users of SugarCRM software, Roberts explained that CRM is a market that will not fall by the wayside the way that other business fads have. Rather, it will continue to evolve. “The most important parts of any business are the revenue stream and the customers,” he said. “Managing that is the number-one metric. The market is constant and will always be here.”

That said, he stressed that his company’s self-described radical approach to the CRM solutions space -- providing open-source coding as opposed to proprietary technology -- is well positioned to take advantage of the next evolution. “Think about the manufacturing process of software-as-a-service,” he implored. “It’s similar to the auto industry. We’re moving from the big gas guzzlers, to the SUVs, and now to the [Toyota] Prius.”

Roberts admitted he would also like to see SugarCRM become a public company. Roberts told the crowd that after four years of build-up -- the company now has 165 employees and 4,000 customers -- he believes “[SugarCRM] can become a public company in the next one to two years.” 

Why? Because Roberts says he and the other cofounders, Clint Oram and Jacob Taylor, asked themselves one question back in 2004: Is it possible for the best ideas and engineering to win over the best sales-and-marketing strategies? “The last 20 years, the problem for smaller companies [was] that success was largely based on marketing spend,” Roberts recalled. “They had trouble getting market share over the big companies, and that really bothered me. There were days that those types of vendors were in total control, and now I reject that notion.”

Thanks to the Internet, Roberts says engineering can finally beat companies that spend most of their money on sales-and-marketing initiatives. “The infrastructure to really take on the big giants wasn’t possible until a few years ago when the Internet exploded in popularity,” he said. “For the first time in history, the environment is here in which the best technology can win.” Roberts stressed that vendors using proprietary technology are locking companies in -- something that hardly benefits the customers themselves.

He added that vendors that try to place customers in a locked-in basis are not strong in engineering. “For them, the technology just had to be ‘good enough,’ ” he said. “What are companies afraid of? Earning your business year in and year out?”

Roberts said that there are five main trends shaping technology today that lead him to believe that SugarCRM’s approach -- providing commercial open-source software that companies can examine and configure for their own lines of business -- will pay dividends. Those trends are:

  • ideas, willpower, and the Internet;
  • belief in the intelligence of crowds;
  • consumerization of IT;
  • cloud computing; and
  • global language of sharing.

Roberts told attendees that he is excited about the benefits his company could potentially draw from this cornucopia of evolution and technology. “One day, we will be a billion-dollar company,” he said, just a day after Marc Benioff, the cofounder, chairman, and CEO of Salesforce.com, announced that Salesforce.com had officially hit a billion-dollar run rate. “The commercial open-source model is strong -- and we will earn your business.”

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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