SUGAR CRM SOFTWARE REVIEW
While the SugarCRM product name of "Commercial Open Source" sounds like an oxymoron, the company follows a similar open source business model as many. SugarCRM has a three-tiered business model: the company gives away the basic open source software software application; sells the professional version which includes some proprietary code and more advanced features such as integration to Microsoft Outlook; and, sells an enterprise version with support for Oracle, disconnected mobile support, customer self service, needed reporting and system integration capabilities for companies wanting to achieve full CRM software potential.
SugarCRM offers CRM software in three editions: Sugar Community Edition, Sugar Professional and Sugar Enterprise. Each product stems from the same code tree, with the free Sugar Community Edition offering about 85% of the functionality contained in the fee-based products of Sugar Professional and Sugar Enterprise. The CRM software products originated on the LAMP stack of Linux, Apache, MySQL and PHP, but also run on other platforms that can deliver Apache, MySQL and PHP (such as Windows, Solaris and Mac OS X). SugarCRM can also use other databases such as Oracle. The CRM suite includes sales force automation (SFA), marketing campaigns and customer support.
- April 1, 2004, the company is founded by John Roberts, Clint Oram and Jacob Taylor (of the former Epiphany family) who introduced an open source project on SourceForge. The company started with 10 employees and charged $149 per user per year for a set of support services to accompany the free open source software.
- August 2004, the company raised its first $2M in venture financing led by Draper Fisher Jurvetson, a Silicon Valley venture capital firm.
- September 2004, more than 25,000 copies of Sugar Open Source had been downloaded from Sourceforge; the following month Sugar was named the "Project of the Month" on Sourceforge.
- February 2005, the company raises another $6M in second round financing, led by Walden International, a venture capital firm based in San Francisco.
- October 2005, company announces receipt of $18.77M in Series C venture funding with lead investor New Enterprise Associates (NEA).
- November 2006, Sugar CRM is said to have between 300 and 350 customers who have purchased the Enterprise or Professional Editions, with up to 400 seats. CEO John Roberts says that about 65% of customers purchase the software (on-premise) while the remaining purchase the hosted version (on-demand CRM).
- December 2006 company claims that software is downloaded more than 1,500 times per day, has been downloaded more than 350,000 times since release in July 2004 and company has 1,000 paying customers.
- July 2007 company adopts GNU General Public License version 3.
- August 2007, Sugar community assembles about 400 third party complimentary applications.
- 2007 sales of $14.5M (source: Hoovers).
- 2007 headcount of 110 (source: Hoovers).
- January 2008, company claims 4,000,000 downloads and 60,000 members.
- February 2008, company claims 3,000 commercial technical support accounts for its freely downloaded product.
- January 2008, Sugar CRM announces $14.5M in Series D venture funding. This round was led by New Enterprise Associates along with former investors Draper Fisher Jurvetson and Walden International also participating. The company has raised a total of approximately $46 million to date.
- May 2008, SugarCRM announces the Data Center Edition (DCE) which allows users to manage multiple instances of the CRM software solution.
- May 2009, SugarCRM founder and CEO, John Roberts, suddenly departs the company. Sugar appoints board member Larry Augustin as interim CEO and provides no explanation of Robert's sudden departure. Much market speculation that SugarCRM has burned through its over $50M venture financing without reaching positive cash flow generation.
- July 2010, SugarCRM version 6 released. New features include a PHP application that can run under i/OS, a revamped GUI, easier installation, and better integration with mobile devices.
SugarCRM strengths among the market of CRM software as a service solutions include the following:
- SugarCRM offers a free open source application known as Sugar Community Edition. This was previously referred to as Sugar Open Source. The open source version of the customer relationship management software contains about 85% of the code found in Sugar Professional edition. The CRM software is also available as an on-demand hosted solution starting at about $39.95 per user per month.
- The software installation process was simple and intuitive - simply download the PHP code, untar it to an Apache server directory (bundled with PHP and MySQL) and you quickly have a simple customer relationship management software solution. SugarCRM can be installed with an open source stack that includes the MySQL database, the Apache Web Server and the PHP scripting language and tools.
- Since the release of version 5 in 2007, SugarCRM is licensed under GPLv3. The company previously used its own Sugar Public License, which was a derivative of the Mozilla Public License.
- The 2007 upgrade of Sugar CRM's marketing features, including a campaign wizard, campaign manager, automated lead capture functionality and support for multichannel marketing have added much needed marketing functionality.
- The SugarExchange is a young but growing marketplace of third party developers and CRM-related product solutions.
- Although the company has only recently exceeded the $10M annual revenue threshold, CEO John Roberts forecasts over $100M in annual revenues within two years and projects an IPO (initial public offering) for the company in 2009.
- Sugar CRM software is available as either an on-premise solution or a software as a service solution.
- The SugarCube hardware appliance is a rack-mounted device targeted at small businesses that want to internally manage their CRM application instead of have it hosed by a third party. This appliance is available for either the Professional or Enterprise software versions and comes in two different models, each with different user limits. Pricing starts at $4,995 USD (not including maintenance subscription fees) and will support up to 100 users on the entry level version.
- Sugar's revenue allocation away from sales and marketing and toward R&D may give it a competitive advantage. According to CEO Roberts, "Software is bought, not sold," using an adaptation of the M&A adage, 'small companies are bought, not sold.' This suggests that customers will purchase the CRM software after they have used the free open source version.
SugarCRM weaknesses among the CRM software as a service solutions include the following:
- The "multi-instance" hosting architecture is a unique deployment model that all other CRM SaaS solutions have chosen to avoid. While SugarCRM spins the multi-instance hosting method as a competitive advantage, we found no substantive customer advantages to this on-demand delivery approach. While small businesses will likely be ambivalent to the multi-instance hosting architecture, this shared services approach will alienate middle market and enterprise companies.
- The user interface and user experience could benefit from increased use of Ajax. SugarCRM introduced a new Ajax email client with version 5 in late 2007, however, the rest of the application fell short.
- Sugar's use of PHP as a development platform, rather than Java/J2EE with native support for Oracle, accelerated the CRM solution's development, however, severely limited scalability. This lower-end architecture will eliminate SugarCRM as a consideration for most enterprises.
- The company's corporate viability is suspect. The company is believed to burn much more than $1M per month and is far from profitability. Several insiders believe that SugarCRM's IPO claims are premature, immature and unfounded.
- Software functionality and feature sets are well suited for small business companies, however, not sufficient for most middle market or enterprise companies.
SugarCRM's primary competitors are other open source CRM software solutions such as Anteil, Compiere, Daffodil, openCRM and vTiger.
Other SugarCRM competitors include Salesforce.com, Microsoft Dynamics CRM and Entellium.
Additional SugarCRM software reviews can be found at:
SugarCRM Software Evaluation
10050 North Wolfe Road
Cupertino, CA 95014-2519
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