Better Way to Build and Distribute Software

In an industry dedicated to improving customer relationships (CRM), it is interesting that proprietary software vendors spend between 50-70% of revenues convincing customers to buy their product (sales and marketing) and less than 10% of revenues actually making better products (engineering).

We thought there was a better way. Why not write our product in public and distribute it through an open source license? Individuals and companies would be free to evaluate the product and engage with SugarCRM when they were ready for a commercial relationship. We could shorten the costly and time-consuming enterprise sales cycle while allocating more toward engineering (almost half our company is part of R&D). The model requires putting your product in front of your sales force, which means having a fast, intuitive application that is easy to learn, use and extend.

Customers want flexibility, not artificial restrictions and vendor lock-in

Enterprise software vendors often create artificial restrictions in order to lock customers into their product. Grandiose and confusing statements from SaaS vendors such as the “future of software is no software at all” and from traditional client/server vendors fretting that open source is “IP socialism” are exaggerated.

Yes, On-Demand is important, but it is only one way to deploy software. We offer customers the choice between on-demand and on-site options (and the option to switch from one option to the other) because it gives them the flexibility they need to serve their own customers. If a vendor tells customers they must go On-Demand, it is more about their business model that it is about the customer’s.

As for “IP-Socialism”, open source is a democratizing force, not a socialistic one. If a product is strong and meets a need, an open source license allows the product to reach more people. Open Source enlarges markets and allows innovation to flourish. That is why, in just two years, Sugar Open Source has been downloaded over 1,000,000 times and translated into over 50 languages. Over 300 complements and extensions to Sugar Open Source have been contributed by our user community.

There are a lot of smart people outside of Silicon Valley

The Sugar Open Source Project and Community are at the heart of our mission. Creating an ‘architecture of participation’ where users from around the world can help to build a higher quality, more useful product is a superior form of development than the traditional Silicon Valley model of a few product managers dictating what features the world needs. The open source model embraces the world outside of Silicon Valley instead of keeping it at arm’s length.

When we started SugarCRM, we hoped there was a better way to build and sell enterprise software. Now, years later, that hope has turned into confidence. There is always a better way.