SugarCRM was kind enough to invite me to their Analyst day and conference – a 3 day event packed with product, strategy, customer and partner information. Their focus was clearly on their momentum into the enterprise. Here are my thoughts:
- The CRM market still has room to grow.Sugar used IDC‘s numbers to project CRM market growth. They are: $18.74B for 2012, $19.97B for 2013 and $21.37B for 2014. Even though CRM vendor solutions are mature, the CRM market has not stagnated.
- The SugarCMR 6.5 product. Today, Sugar CRM has 1M users, has seen 11M downloads, is used by 80,000 organizations and has 350 partners on 5 continents supporting the product. Its newest release focuses on usability and performance enhancements. It offers simplified navigation, an enhanced UI design, a new search framework with integrated full-text search, new calendaring and scheduling capabilities, IBM platform support, as well as deeper integration with third party apps. Although the product lacks advanced social features and robust analytics, it does provide solid, well-rounded CRM capabilities.
- The open source focus. Open source is more than a movement. It provides results by allowing their 30,000-large developer ecosystem to evolve the product in line with customer demand. “Open” is also part of Sugar’s culture – for example, pricing is readily available on their website, and you can try the product for free.
- The IBM relationship. Sugar CRM runs on IBM hardware, or alternatively can be deployed in the IBM cloud, and is integrated with Cognos for business intelligence, SPSS for advanced analytics, Lotus notes for email, Lotus Live and Connections for collaboration, Unica for marketing and more. IBM and SugarCRM also have a well-aligned go-to-market strategy.
- Their partner ecosystem. Their partners have a global reach and are responsible for the sales and support of SugarCRM. Partners are also able to customize the application, and offer customized versions on their application exchange (SugarExchange). Over 100 solutions are currently posted. The top 10 partners added 400 customers last year which demonstrates their influence.
- Their market momentum.SugarCRM turned cash-flow positive in Q4 2010, and has been growing since then. They have reported 10 quarters of record sales, and in 2011 saw a 67% increase in sales from 2010. They recently raised $33M in venture and debt funding which they will use to continue its advancement in the enterprise CRM market.
- Large scale endorsement. IBM has recently announced the replacement of close to 70,000 seats of Siebel with Sugar CRM which displays the maturity of the solution in the enterprise.
The CRM market is consolidating around 3 main large players: Oracle, SalesForce, Microsoft. Oracle and Microsoft offers a complete end-to-end solution of hardware, middleware and software which has demonstrable total cost of ownership benefits. SalesForce offers similar benefits in using their cloud model. SugarCRM, by aligning with IBM is also leveraging these efficiencies. Event though SugarCRM is a small company (about 250 employees), expect to see SugarCRM, with the help of IBM start to surface in larger deals in which these players are competing.
