SugarCRM update due in beta next month

SugarCRM plans to ship the beta version of Sugar 5.0 next month, an upgrade to its open-source CRM software that should make it easier for companies to extend the product with third-party applications, company executives said Wednesday.

The release comes at a time of rapid growth for SugarCRM, fueled in part by the increased use of its software on servers running Microsoft's Windows Server OS and SQL Server database.

SugarCRM's last big upgrade, Sugar 4.5, was released in August last year and aimed to round out the suite's core CRM functionality as well as adding better compatibility with Microsoft's server software.

This year's release, version 5.0, will be focused on improving the product's underlying software architecture, said John Roberts, SugarCRM's chairman, CEO, and co-founder. The aim is to make the software more extensible, he said, meaning it should be easier for developers to build their own applications and link them to Sugar 5.0.

The goal is to ship the final product in July with a beta due out a few months before that, probably in April. Roberts said. The company expects to offer its software under both the Mozilla Public License and the GNU General Public License Version 3, which is expected to be finalized soon.

Making Sugar 5.0 more extensible is critical, said one industry analyst, because customers increasingly want the ability to extend their CRM applications to fit with their particular business processes.

"Salesforce.com has really set the bar, and that bar includes the ability to customize native applications and to incorporate applications written by other parties," said Denis Pombriant, principle at Beagle Research Group LLC.

Making Sugar 5.0 more extensible may be a first step by the company in building its own applications community, much as Salesforce.com has done with its AppExchange, he said. Other competitors for Sugar include NetSuite, SAP, and Oracle.

Rob Bois, a research director at AMR Research, said SugarCRM is trying to appeal more to large enterprises, "where integration and interoperability becomes fairly critical."

SugarCRM has grown quickly since it was founded three years ago. It says it has 1,200 paying customers, double the number it had 10 months ago. By the end of the year, it expects to more than double the number again, to more than 3,000 customers, Roberts said.

A good portion of its growth has resulted from its partnership with Microsoft last year to create better interoperability between SugarCRM and Microsoft's Windows Server, Active Directory, and SQL Server.

Most Sugar installations today are on the open-source LAMP stack -- Linux, Apache, MySQL, and PHP. But as many as 45 percent of new licensees are using Windows, up from 30 percent before the Sugar 4.5 release, Roberts said. And SQL Server is gaining in popularity against MySQL and could soon account for half of the new SugarCRM installations, Roberts said. "SQL Server is very strong," he said.

Clint Oram, the company's other cofounder, went further, saying Windows sales could surpass Linux sales before very long. "It's certainly a possibility," he said.

SugarCRM is also looking for growth in Europe. Oram, who also runs Sugar Online, is relocating with his family from the U.S. to Dublin next month, to open the company's first dedicated European sales office.

Building a business in Europe brings challenges, however. About 40 percent of SugarCRM's customers use the hosted version of its applications, which are served from a data center in Santa Clara, California. Europe's data privacy laws make it difficult in some countries to store customer data in the U.S. In addition, some customers don't like the idea of having their data stored on servers so far away, said Pascal Brunel, ebusiness manager at Synolia, a SugarCRM distribution partner in France.

As a result, the company is in the process of establishing data centers in Europe to serve hosted customers there, Roberts said.