Founded as an open source project in 2004, SugarCRM applications have been downloaded over five million times and currently serve over 500,000 users in 75 languages. As well as being an open source champion, the firm has a strong Cloud story to pitch.
“We are open source, but we rely heavily on our Cloud strategy for differentiation,” argues CEO Larry Augustin. “The open source aspect remains vitally important though. I can see a lot of things in common between open source and Cloud Computing. If you take a step back, they're both about lowering barriers to adoption.
“I've had this conversation with some people who argue that they're competitive, but really they're about the same thing from a customer perspective. Customers wants easier adoptions. They don't want to have to go through long and cost adoptions and implementations. Anything that allows a customer to get started cheaply, quickly and rapidly is of interest. Cloud works like that, open source works like that.”
Augustin foresees a world in which the old on premise applications sit alongside the new generation of open source and Cloud versions. “We favour the hybrid approach,” he says, “When you deploy our architecture in the Cloud, everyone has their own database instance and I think that approach works. It's a pendulum thing – these things don't go all the way one way or the other. Databases at customer sites are not going to go away There are too many things in them that end up being mission critical.
“At the same time, cheaper availability of bulk resources outside the organisation, in the Cloud, is going to make that a resource that enterprises are going to want to take advantage of. Does that mean that the whole world moves out into the Cloud? No. In the same way the Microsoft world doesn't mean that the world is not going to use the Cloud and stay internal.”
Many applications firms in the on premise world have very symbiotic links with the big ticket systems integrators such as Accenture. Augustin reckons the nature of this relationship between consultancies and applications vendors will have to change. “SaaS applications do limit you ability to integrate and they limit the ability of an Accenture to customise, integrate and so on, the stuff that they have been making money out of,” he argues. I find it hard to imagine a business the size of Accenture emerging in the Cloud market as there's just not enough for them to do from an application integration point of view.”
But the likes of Accenture do have a potential future role, he suggests. “What is limiting for customers is that, even more so than with a proprietary piece of software, their ability to differentiate at the customer level goes down. They get a more generic solution in a SaaS application,” he notes. “In the open source world, we see a lot of mid-sized systems integrators who take open source applications, integrate them, then offer them as a service. They're able to do that integration at an apps level and to take that offering out to particular vertical markets. It's fascinating.
"I think the Salesforce.com, Netsuite sort of model is difficult for an Accenture. But the Cloud model in which an Accenture takes some services, integrates them and then runs them on Amazon or whoever, that can work. It's still doing apps integration, just deploying them in a different space.”
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