Transcript: A Little Sugar in Your Mashup

This transcript is from a PodTech.net podcast at:
http://www.podtech.net/home/technology/1676/a-little-sugar-in-your-mashup

Guest: John Roberts - SugarCRM
Host: Paul Lancour - PodTech.net

Paul Lancour - PodTech.net
Welcome to Connecting with Revolutionary Minds. Conversations with IT and Business leaders from WebEx. In this series of podcasts you'll hear from IT and Business pioneers working on the leading edge of the on demand business. Catch the latest trends, and find out where the industry is heading. I'm Paul Lancour with Podtech.net and for this Podcast I sat down and spoke with John Roberts, CEO of SugarCRM; John founded SugarCRM in 2004 on the idea that Open Source was the Future of Customer Relationship Management software. I asked him how he came to that conclusion?

John Roberts - SugarCRM
Well, I came to Silicon Valley in 1995, and spent pretty much my entire career building 100% proprietary CRM applications, and it's really in the fall of 2003, we really started questioning just the nature of how software is developed, especially at the enterprise application level, and we were starting to question, Is building 100% proprietary applications, or 100% proprietary On-Demand applications? Really, the future -- does it really generate the best software?

Paul Lancour - PodTech.net
What was it at that times that brought these questions up?

John Roberts - SugarCRM
It really was, when you specialize in a certain class of software, such as my case; Customer Relationship Management Systems, and also being a very engineering products focused person in terms of where I spent my career, I just saw a lack of innovation in the market space around CRM apps, for both on demand and On-Site. I just started looking and I was wondering why that is? I started looking at the financials of proprietary firms, and I started seeing that, some of the largest CRM providers that spent 80% of their operational expenditure on sales and marketing, and less than 10% on engineering.

They write these 100% proprietary environments for on demand or On-Site and I just thought, that's crazy, that they have a company that's makes CRM software. Software are supposed to make this operation much more efficient; yet they spent 80% of operational expenses on sales and marketing themselves. So, I knew that there was -- had to be a better way because obviously these apps were good, they wouldn't themselves need to spend that much. So we started looking at Open Source projects; obviously Linux, Red Hat, MYSQL, JBoss, and started looking at their models, they are the commercial Open Source model, and started saying, "Wow, this model could actually apply to the application layers as well." I think that the main area that we have a different belief system which is -- in Silicon Valley.

I think we've done a great job of convincing people that source code is really bad, and that there is only limited ways in which software can be deployed or it's 100% on demand or On-Site. So, we had this--we just started to go down a different road to say that the basis of the company should be Open Source software; writing software in public is a really good thing, putting the customer in control, being open in terms of the environment whether it's Windows, Linux, Mac OS X, FreeBSD, UNIX whatever they want to run on, and not creating these artificial restrictions around the software itself.

I think writing software in public gives customers control, allows them to extend the software in any way, and I think we've just been living in this world where proprietary vendors are just based on locking people under proprietary technologies, but they themselves don't invest very much in the software, and so that's why they're -- I think there's a real lack of innovation.

Paul Lancour - PodTech.net
So, what I hear you saying, is there a couple of great things about this, one is that you can focus your attentions on developing and perfecting the software as oppose to marketing and sales, and secondly this gives the customer the greatest amount of flexibility with regard to having the software meet their needs?

John Roberts - SugarCRM
Yeah absolutely I think what we do is we put true CRM; a software in front of our sales force instead of our sales force in front of the software, that's why it's -- even for an enterprise business applications such as SugarCRM. It's as easy as going to sugarcrm.com and downloading and installing it on your laptop or your enterprise Linux servers, or Windows servers, or UNIX servers and really doing and a full evaluation and maybe just running sure your Open Source a 100%, and seeing that the software really adds value to the corporation, and that's where investing heavily in the project sugarforge.org is the epicenter of our Open Source project; really adds innovation and ideas back into enterprise software versus the vender lock in model, used by the big On-Demand guys and On-Site guys which is all about how do I lock customers into this propriety ecosystem, but their "open API's" but...

Paul Lancour - PodTech.net
Taking a step back perhaps, how does what you're working on fit in with the world of On-Demand software, and is it a part of this -- is SugarCRM part of a larger movement toward on demand software and What's driving that in the marketplace?

John Roberts - SugarCRM
On-demand makes a huge amount of sense for organizations that have -- do not have, or are not interested in running their own servers. It's same where -- we believe the costumer should be in control, whether that's On-Site or On-Demand, so we offer both Sugar On-Demand on a monthly basis, or Sugar On-Site. What is unique about our On-Demand offerings is that they are completely managed, we manage all of the upgrades, we manage all the extensions, the customer simply logs in and can completely customize the app using the Visual Tools.

What's also unique about ours is, we do allow the customers have control of the database and so they can extend it unlike, if we only did a multi-tended thing where they really wouldn't have access to the core application. We also give them the power, if they wanted to move back On-Site at some instance, so they're running a -- lets say, a small team of 15 or 20 individuals, and then they decide, "Well, lets roll out this to 100 people, but then lets bring in back On-Site so we can tightly weave it in to our financial system." We also give them that capability of being able to diverse deployment options.

Paul Lancour - PodTech.net
So, is that what you are finding is generally smaller-medium size businesses are the ones who benefit mostly from the On-Demand.

John Roberts - SugarCRM
No it actually varies; it can be a small team in a large corporation. It can be the small company just 100% running On-Demand, I think it does vary for different reasons. Some folks just really like our application, and they have got a sales force and they're running it, and they care less that we have an open architecture and Open Source based. For them it's just the quality of the service and our On-Demand operations and the app that we provide. I think what's intrigue; we just did a partnership with WebEx and what's really nice about that it's a very tight leveraging of two On-Demand environments.

So, taking WebEx which is -- the heart of WebEx is collaboration the ability to create Real-time meetings, collaborate in real time and then wrapping Sugar Open Source around Sugar On-Demand around it. So that you can provide within a customer interaction you can reach out and create a meeting in real time, and create basically shorten sale cycles, increase the urgency and the pace of collaboration also with their new partnership what they AOL and AIM Pro you can create real time meetings on the fly with tight integration with the AIM Pro Instant Messenger. So, I think there is a good example of two On-Demand venders being able to create a composite application that leverages the power of WebEx, and Media Center with a CRM system behind it which was adding context to the interaction.

Paul Lancour - PodTech.net
These On-Demand applications used in conjunction with one another or mash-ups is what we are calling these, offer among other things real time access to data, and real time customer interface that is a great advantage for customers who are using WebEx, and SugarCRM for example together.

John Roberts - SugarCRM
That's correct. The real synergies of WebEx and SugarCRM is that CRM systems are really designed to generate demand, whether its doing outbound campaigns, it's generating interest in the company, bringing them response to websites, connecting them to your sales force and your customer services organizations. But these applications in general though are relational database based apps, and what the combination of WebEx does is that it adds a real time layer to the management of -- managing customer interaction across sales marketing customer support. So, the combination of a Meeting Center such as WebEx and the tight capabilities that we've weave together and in the context of a human interaction makes a tremendous -- adds tremendous value then; just then (Inaudible) applications.

Paul Lancour - PodTech.net
So, you founded SugarCRM on the idea that Open Source was the future of CRM applications, how's business?

John Roberts - SugarCRM
Business is as excellent -- we are. You're right, we're a relatively young company about two and half years; we founded the Sugar Open Source project in April of 2004, has quickly become the largest Open Source CRM project on the planet. Today we are head quartered to Cupertino, California with 85 employees; we have over 900 customers worldwide and our (Inaudible) translated into over 40 languages worldwide. We're extremely strong financially, we've got over 26 million, we've raised in venture capital, and yeah, we're very excited about the future.

Paul Lancour - PodTech.net
Well, great. Thanks a lot for joining us, and talking to us about SugarCRM.

John Roberts - SugarCRM
Thank you for having me, Paul.

Paul Lancour - PodTech.net
John Roberts is the Co-founder and CEO of SugarCRM.

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