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SugarCRM takes big bite of proprietary software market

SugarCRM takes big bite of proprietary software market

Scalability is one of SugarCRM's secrets for success

SugarCRM is another open source provider that is eating into the proprietary software market.

Chief technology officer Clint Oram says the company’s revenues grew 67 percent in the most recent fiscal year, and Q4 revenue on last year's Q4 figure was up more than 90 percent.

“Our growth has all been organic,” he says. “We’re also recently raised $US33 million to boost our cash reserves. It’s a mixture of debt and more funds from existing investors.”

SugarCRM is a privately held company so doesn’t post financials.

“We’ve also doubled our number of employees to 270,” Oram says.

He was in New Zealand recently to address the Government ICT Council, a meeting about the benefits of commercial open source, organised by local SugarCRM reseller Holistec Systems.

“All the CRM vendors are getting good growth,” Oram says. “Our main competitor in the US is Salesforce, followed by Microsoft. Internationally, Micosoft is first, followed by Salesforce.

“In the enterprise market, people are busy replacing Oracle (Siebel) and SAP.”

One of the reasons for the success of SugarCRM is that it is massively scalable, he says. “It can run in any environment, in public clouds like Amazon or in-house. The enterprise is our major area of growth.”

He says Australia and New Zealand are investing strongly in the enterprise space. “It’s our third-largest area of revenue.”

SugarCRM opened an office in Sydney a year ago. It has 25 channel partners in Australasia, four of which are in New Zealand.

Oram says commercial open source has grown up. “Red Hat exceeding $1 billion in revenue is a most telling point. It shows the vibrancy of the space.

“The price of success is that open source becomes mainstream. It’s just another way for companies to build software. The way you build software is far less relevant than the problem you’re solving.”

He says enterprises like the ease of acquisition of open source. “The larger companies have much more control over their risk; they can take direct ownership. That allows them to try new ideas and makes it much cheaper to fail.

“With proprietary software, you’re dealing with a 1990s design and massive upfront investment.”

Asked about issues of support, he says commercial open source brings stability. “For example, at Sugar we have 50 dedicated engineers. Recruiters for companies like Google are always trying to steal them from us.

“The open source model attacks some of the best talent in the world. Society is changing. It’s all about collaboration now.

“When we started off we didn’t so much choose open source as drive openness. And openness drives trust.”


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