According to a Gartner report titled Forecast: Enterprise Software Markets, Worldwide, 2012-2017, 2Q13 Update, the worldwide customer relationship management (CRM) market is projected to grow 15% annually to $36.5 billion by 2017. While Salesforce.com remains a dominant force in the market, there are others that are showing strong growth potential as well.
One such player is Cupertino-based SugarCRM. SugarCRM was founded in 2004 by Clint Oram and John Roberts as an open source CRM company. Sugar was formed when Mr. Roberts began to focus about the way senior executives in organizations treated customers and revenue stream. He believed that OpenSource could be used to address business problems. He joined hands with other engineers to write the code for the first version of SugarCRM. The product was well received and soon they saw over 40-50 downloads per day. Today, the company provides organizations with the ability to better manage their sales pipeline. SugarRM offers an easy-to-use, cost-effective option for open platform web-based CRM solutions that can be scaled to meet the organization’s needs.
SugarCRM’s products are available for use by customers either on-premise or in the cloud. The company offers multiple types of subscriptions which come with basic features such as scheduled data backups, social media integration, and mobile device accessibility. The basic edition, Sugar Professionals, is priced at $35 per month, and customers can opt for premium versions that cost as much as $100 per month. Sugar Ultimate, the highest end product, comes with features such as customized reporting, self-service portals for customers, and 250GB of storage on the cloud. Sugar also operates a freemium service wherein it offers its basic CRM for free to the developers. Customers wishing to upgrade can choose to select the additional features at a price.
SugarCRM has a very active channel partner program to support their customers and drive sales. It is also a member of the IBM Global Alliance Portfolio, through which it is able to integrate their products with IBM’s products. Recently it announced integration with IBM Unica to help organizations with cross-channel marketing optimization and also extended integration with IBM Connections as part of the social selling efforts.
SugarCRM’s products have helped them become a product of choice for customers in insurance, manufacturing, and healthcare. As of May 2013, it had more than 6,500 customers with more than 1.2 million end users.
SugarCRM does not disclose its financials, but in recent interviews, the management has claimed that the company recorded revenue growth of 60% last year. During the first quarter this year, revenues grew 30% over the year. They turned cash flow positive in 2011. As of November 2012, nearly 800,000 users were operating on the freemium model, while another 200,000 subscribed to the various paid for editions.
The company remains venture funded and received $120 million in funding from Draper Fisher Jurvetson, Walden Venture Capital, New Enterprise Associates, Silicon Valley Bank, Gold Hill Capital, and Goldman Sachs. The latest round of funding, held earlier this month, helped SugarCRM raise $40 million. Analysts believe that SugarCRM is looking to go public soon. The company had talked about the possibility of an IPO by this year.