SugarCRM to unveil significant upgrade to open-source CRM app

SugarCRM announced a $33 million venture capital investment that will go toward winning enterprise business

SugarCRM is expected to discuss a significant upgrade to its open-source CRM (customer relationship management) software during the SugarCon event in San Francisco.

The show comes shortly after SugarCRM announced a $33 million venture capital investment that it intends to spend in pursuit of larger companies, rather than the small and midsized businesses that have dominated its customer base.

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The company's ambitions for enterprise-level deals should be placed in context, as SugarCRM defines an enterprise as any company with more than 1,000 employees and a decent percentage of workers who deal directly with customers. That approach means that at least for now, SugarCRM isn't necessarily planning to go head-to-head with the likes of Salesforce.com or Oracle for the business of global companies with tens or hundreds of thousands of workers.

SugarCRM's new capital investment also pales in contrast to the vast sums Salesforce.com has spent on marketing and sales during its steady march toward $3 billion in annual revenue.

But SugarCRM has actually benefited from Salesforce.com's spending spree, said Nick Halsey, chief marketing officer. "They've raised the market's awareness for the needs and capabilities of CRM," he said. "We offer a different vision of how to deliver that."

For one thing, SugarCRM has an advantage over Salesforce.com because it gives customers a choice of cloud deployment platforms as well as the ability to run the software in-house, he said.

The key for SugarCRM is to add partners with experience selling into large enterprises, said CTO and co-founder Clint Oram.

In addition, "we do have a lot more to do on the product," Oram said. "We have plans in place to double the size of engineering team, and we're well into that." Once complete, SugarCRM's engineering team will have 100 people, according to Oram.

SugarCRM is already prepared to serve larger companies in terms of scalability and performance, Oram said. "The original development team came from building enterprise CRM applications. We architected for scale at the beginning."

But "application functionality [for enterprise CRM] is a bit of a different world," Oram added. For example, sales forecasting is a much more considerable task at the enterprise level, given the complex makeup of sales organizations and "slicing and dicing" of market segments that tends to go on, he said. Forecasting is one area where SugarCRM plans to invest, Oram said.

Version 6.5, which will be announced during SugarCon, includes some new features that may have enterprise-level appeal, including a refreshed user interface aimed at boosting user productivity; support for running IBM's DB/2 database underneath the application; and enhancements to the SugarLogic development toolkit.

The update also adds in a full-text search engine powered by the Lucene-based Elastic Search open-source project. However, the search feature is delivered as a pluggable framework that allows customers to use any search engine they like.

SugarCRM is also boosting its social networking and e-commerce credibility, adding integrations with IBM's Connections, WebSphere Commerce and Sterling Commerce applications. Customers can also deploy SugarCRM on IBM's new PureSystems private cloud appliances.

SugarCon will also see announcements from a number of SugarCRM partners, including search vendor Lucid Imagination and Intacct, maker of on-demand financials applications. Both are integrating with SugarCRM. At least 800 people are expected to attend the show, according to Halsey.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's email address is Chris_Kanaracus@idg.com.

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