03/13/12

Sugar CRM: a European perspective


Tom_SchusterThis is the third Sugar CRM executive to be interviewed by visionary marketing.com. My first interview took place two years ago with Larry Augustin, CEO and founder of the CRM company, who is also one of the people who coined the phrase: “open source”. After a brief Skype encounter with the company’s marketing executive Jan Sysmans last year, I now had the chance of spending some time with Tom Schuster, VP EMEA of Sugar CRM. Let’s see what’s happening in Europe with regard to the development of CRM usage in this exclusive interview with took place a few weeks ago.

Sugar CRM: less known than Salesforce but doing frightfully well

Larry had explained his plans 2 years ago and 2 years later, we can say that “he has delivered on his plan” Tom said. Sugar CRM has been through phenomenal growth and is becoming, according to him, the “fastest growing CRM company in the world”. So, what are the numbers? Sugar CRM grew by  52% in 2009-2010 and 67% 2010-2011 and the company has been cash positive since end of 2010. Whereas it is still less known than Salesforce, which was started in the 1990’s, Sugar CRM are broadly recognised. “It’ a fantastic company” Tom Schuster added, “ in 2012,  we are planning 100% growth in Europe!”  imagea foray into the high end market … with a little help from IBM

images (2)Sugar CRM is in its 7th year of operation. It is mostly active with mid market customers (i.e. with 100-150 users), but in the last 6 months the company generated more activity with higher end customers (those with 1000+ users). “This is a space we didn’t target at first, but in which we are definitely getting” stated Tom Schuster.

This hasn’t been quite left to chance though; for “Sugar CRM has a strong relationship with IBM and work very closely with them  in the field”. This is what is driving a lot of the growth. Tom has actually seen an acceleration of his business since Q4 2010. According to Tom, Sugar CRM is “now in 3rd position globally in terms of number of users, with Salesforce at the top of course. The open source company “can now boast well over 800,000 seats worldwide and this is still accelerating” added Schuster.

Close integration with IBM has also been worked out from a technical point of view (with regard to the Cognos and Lotus product lines). IBM helps Sugar CRM address both the mid market and  very high end customers.

Sugar CRM in the magic quadrant

“There are  between 200,000 and 350,000 users in Europe” Schuster added, “this is pretty big business”. And Forrester gave the company an accolade by placing it in the leader portion of its CRM magic quadrant, i.e. not just celebrating the company’s vision but also its execution capabilities.

the ride of open source

“Open source is now able  now able to compete with regular software publishers” Tom Schuster went on. This isn’t new if you include open source stars like EZpublish (of which I am a client), Drupal or Joomla for instance. Yet, Sugar CRM is the first in the application arena to make such a big breakthrough. “With Sugar CRM we are going beyond mere open source software” Tom developed. “the code is free and can be changed, but building a business on that concept of openness and community is mostly about state of mind and attitude” he rightfully added.

3 focuses : social, cloud and mobile

There are 3 areas for the development of Sugar CRM. Let’s review them now:

  1. 2.0-largesocial: of course, our readers know about that, this is a very hot topic at the moment. The real issue is to know how to position the software in the future when social will become very big, that is to say probably very soon. “Lotus live, Web conferencing, messaging systems, linkedIn data, Twitter data are all interfaced and it’s a new way of working with  CRM software” Tom Schuster added. Hirleo (an Israeli company) and Portuguese Gulf are already using Facebook as the main gate to their CRM system. Younger workers want to work with new fangled applications and social media is their favoured starting place. “Most of the marketing data are in the social media space anyway” added Schuster so the challenge is on how one regains ownership of that data.
  2. network-largecloud: can be run anywhere. but it can also be transferred from one hosting service to another. For instance, “one can get started on Sugar CRM with an Amazon cloud infrastructure and then move it somewhere else and this doesn’t cost anything in terms of licence” Tom Schuster went on. This transfer capability is “transparent to them” Schuster added, “Sugar’s code is free and this is a lot more than a buzzword. It’s a movement and while many have old sheep in new clothes, this isn’t the case with Sugar” he added. “Cloud means you choose your service and don’t even know where it is coming from” Schuster detailed . Sugar CRM have their own hosted on demand service, fully replicated, and it also exists on Amazon, which means that when you buy their hosting service you may choose to get Sugar CRM directly while benefitting from all of Amazon’s  cloud features. “it’s really revolutionary” Schuster added, “you have more control on your data, and you can move them 100% without loss and additional cost.
  3. mobile-largemobile: “mobile usage has rocketed up” said Schuster, therefore confirming what I have witnessed over the years too. “as of 2010, only a very small fraction of B2B usage was made by mobile” he said. “2011 saw a huge rise in mobile usage of CRM, up to 15% of total usage” Schuster said, “but it’s growing fast now”. [note: Orange.com mobile usage also amounts to 15%, therefore confirming Tom’s numbers. As of 2010, mobile usage on Orange.com was limited to 10%]. Sugar now exists in 2 different versions: corporate and ultimate. The corporate version  now amounts to 50% of total revenue, and it includes a mobile module, which supports all kinds of operating systems. An application has also been developed for each mobile OS in order to improve user experience. “There is no other way” Schuster concluded. The mobile browser experience is not a pleasant experience”.