SugarCRM eyes a public offering
October 30, 2008 nnyq.com editSugarCRM began in 2004 and offers its SugarCRM package via a hybrid commercial-open source model and delivers it via onsite and on-demand modes. The company has amassed more than 3,000 customers in 30 countries, SugarCRM officials said. InfoWorld editor at large Paul Krill met with Clint Oram, SugarCRM co-founder and vice president of open source community relations, at the company's SugarCon 2008 conference in San Jose, Calif., this week to talk about the company and where it is headed.
InfoWorld: Can you explain the rationale behind coming up with an open source CRM system?
Oram: When we first started thinking about the idea of building SugarCRM, we had spent our entire careers working in the world of proprietary software, working in the development of CRM solutions over the last 10 to 15 years. [CEO and co-founder] John Roberts has been working with CRM since 1992. And what we saw was that it was a very inefficient model, building software [and] keeping your customers very distant from your developers, having product managers in the middle of the process who may or may not actually come up with the right ideas. So what we thought was -- there’s got to be a more efficient way to build software, and we saw the success that was happening with JBoss, MySQL, and others and basically set out to build a new software company that really changed the way that CRM software was built, the way CRM software was distributed.
Some of the key ideas there was to build an open source solution, to really put the power of the development in the hands of a community of developers around this and to shorten the distance between the end-user and the developer. We went on from there and a variety of key ideas [have] evolved over the course of the last couple of years…. We said: Why not architect the software so that you could start off with our on-demand solution, if you don’t have any IT infrastructure in place, and as you grow the solution and as it proves its value to you and that sort of thing… then you can bring it on-site and actually integrate it more deeply with your other systems, such as your financial system, your provisioning system, your order management system.
Another key aspect was the idea of a subscription model. Our focus, our philosophy, was to really focus on delivering value to the end customer, the end-user, as opposed to building a lock-in model. If you look at proprietary software companies, what they do more than anything else is build a very tight lock-in model that keeps the customer entrenched in that company and makes it as painful as possible to walk away from that software solution.
InfoWorld: Does Sugar leverage any open source projects?
Oram: We’ve built all the Sugar application code ourselves. We sit on top of the PHP {Hypertext Preprocessor] application stack. So PHP, MySQL, Apache -- we leverage all those technologies underneath us, but the actual core code itself that constitutes the Sugar application we wrote with our community.
InfoWorld: Why did you use the LAMP [Linux Apache MySQL Perl/PHP/Python] stack?
Oram: That was actually a pretty strategic key decision that we made back in 2004. When we set out, we thought we were going to build a Java application on top of Oracle. That’s what everybody was doing back in 2002, 2003, and 2004. And as we sat down and started prototyping the application, we were actually prototyping it in PHP just because PHP was quick and fast to build a user interface in. Then we started looking at all the different PHP applications that were available on SourceForge. So that’s where we got started, and we started looking at the other PHP applications. One of the key things we looked at was we really wanted to have as many people in the world using SugarCRM as possible, and frankly, PHP is just more accessible than Java for the average person.
InfoWorld: Who are you taking customers away from -- or are you just getting new CRM customers?
Oram: Well, there’s a combination of both. Basically one of the fascinating things about the way the open source model works is that [with] traditional software proprietary models, you spend two years building the software solution, then you go hire a really expensive marketing and sales organization, and then you go out and [do] target marketing into specific segments, hoping that what you’ve built would meet their needs. Hoping that what you just invested in building would actually be the right solution. Open source has a completely different approach in that we build our solution, we post the Community Edition on the Internet, and downloads happen around the world. We have downloads in every country in the world happening right now. And that demand pulls us into markets. So our phone has been ringing off the hook since we first started launching the company back in 2004. We’re not targeting specific segments, we’re not targeting specific sizes of companies. Companies are calling us. We have customers from the smallest of SOHOs [small office/home office] to SMBs [small/medium-size businesses] to SMEs [small and medium-size enterprises] up to the largest of enterprise. … We’ve taken customers away from pretty much everything, from the smallest of solutions up to Siebel's.
InfoWorld: What license are you using?
Oram: Our Community Edition is licensed under the GPL (GNU General Public License) v3.
