SugarCRM preps next version of open-source apps

SugarCRM is preparing for release later this month a major upgrade to its open-source CRM (customer relationship management) system, a software package SugarCRM's founders hope will woo customers that would otherwise turn to more expensive commercial CRM offerings.

Sugar Suite 3.0 represents a significant advance for the young product, which publicly launched in September. The forthcoming update adds campaign management, e-mail marketing, and forecasting components to the suite, along with tools for broader back-office administration like project management and an employee directory.

"We started getting a lot of requests for the ability to manage internal projects," said SugarCRM Chief Executive Officer John Roberts. "People don't always see that as CRM, but I think that's one of the great things about being an open-source company. You sometimes come up with interesting things that you wouldn't traditionally think of, but that are really valuable."

Cupertino, California-based SugarCRM was founded in April 2004 by a group of developers that had worked together at CRM maker Epiphany Inc. Frustrated by what they saw as the inefficiency of the commercial software development process, SugarCRM's creators felt an open-source model could build both better software and the foundation for a viable business, Roberts said. The company is backed by close to $8 million in venture capital funding from Draper Fisher Jurvetson and Walden International.

The software's development home is SugarForge.org, where the source code can be downloaded for free. A commercial version, Sugar Professional, includes customer support and additional extensions, such as improved reporting and data security features. Pricing for Sugar Professional starts at $239 per user, per year and drops with volume licensing. A hosted version is available for $40 per user, per month.

Athenahealth Chief Technology Officer Bob Gatewood is in the process of replacing several hundred Salesforce.com Inc. licenses in his organization with SugarCRM deployments. Waltham, Massachusetts-based Athenahealth has been using Salesforce.com for four years, in which time Gatewood says the privately held healthcare practice management firm grew from $2 million to $60 million a year in annual revenue.

"We've gotten to a size where we need more control and tighter integration with our internal systems," Gatewood said. "We love open source, and we have a sizable development team already. This was really about getting the code."

Gatewood's group has extensively modified SugarCRM to suit its needs and will be going live with its deployment later this month. Eventually, Gatewood expects SugarCRM to roll out to 200 Athenahealth employees, cutting the organization's Salesforce.com licenses from 300 to 100. The move will reduce Athenahealth's software licensing costs, but that wasn't the primary motivation, Gatewood said.

"We have some customer case routing issues. The call center is able to resolve 85 percent of the calls, but the ones they need help with they have to send off to a subject matter expert. Salesforce.com's data structure doesn't make it easy for us to track it when that happens," Gatewood said. "With Sugar, all that stuff is transparent now. We could get in and change the code."