X2Engine founder John Roberts: Traditional CRM systems fat and bloated

SugarCRM co-founder John Roberts discusses some of today's greatest CRM challenges and his new company, X2Engine.

Most traditional CRM systems have become too fat and bloated, according to John Roberts, one of the founders of the well-known open source software company SugarCRM. That's why Robert's latest venture, X2Engine, is focused on CRM simple.

Along with Clint Orem and Jacob Taylor, Roberts started SugarCRM as a project in 2004, and two months later converted it into a company. It grew by leaps and bounds, and many cited it as a model start-up and cloud computing firm. Ultimately, though, Salesforce.com, one of its chief competitors, surpassed SugarCRM in sales and customers. When Roberts left SugarCRM in 2009, it had 4,000 customers with mostly small and mid-sized deployments.

In 2011, Roberts founded a new venture, X2Engine, a Santa Cruz, Calif., company that also offers open source software systems. But Roberts touts X2Engine's product as a lean offering that condenses CRM sales functions into two modules, sales and actions. SearchCRM.com recently got on the phone with Roberts to talk about the complexities facing CRM users today and how he thinks his product can make things easier on them. Here are some excerpts from that conversation:

Why have you decided to stick with open source software in your latest venture?

John Roberts: Sugar was very radical to introduce the notion of commercial open source as a business model. And I think using an open source project to power a corporation, and [how the power of that] design and development process challenged the traditional heavyweight players, has been tremendously successful. Using open source as a business model, that's very common these days. I've always been a firm believer open source is a more efficient way to design and develop applications.

You have said that CRM is not exciting anymore. So where is CRM headed? Do you think it can be exciting again?

Over time, [many CRM] applications had become fat and bloated with functionality, and noisy to some degree.

Roberts: I think it can be again. Although there tends to be a hundred CRM companies, there only tends to be five or six that really matter at one time. Traditionally, those tend to get recycled every ten years or so. I think the business problem of managing the revenue stream and managing customer interactions across your sales organization [is the] most important [challenge] to a company being successful. What I've seen recently in the last couple of years is that, as some of these companies get bigger, they just add more and more features to their core apps every year. As a result, over the course of a few years, they become less useable. [The core idea] of maximizing the productivity of the sales organization and the marketing organization [is a challenge] that companies will always be working on.

You have also said that CRM is entering a "post-Facebook phase." Did you mean that the hype around social media is overblown?

Roberts: The thing that stands out is the user interaction style of these applications. Most of the market leaders' applications were kind of designed before Facebook, before the notion of blogs, before the notion of social blog-style user interfaces -- applications you see traditionally on LinkedIn, Facebook or other social sites. [Those older interfaces] are more static and rigid, in the way they're designed from a data model. It's more from a user experience, more from a design standpoint that things have radically changed in the past four or five years. [It's not because] everyone is being more social. It's more user interfaces have evolved based on B2C and social sites. When you take those user interaction models and apply them to a business context and, in our case, a Salesforce automation application, I think it really has a dramatic impact in terms of usability and the performance of the application -- because [business employees] are already using these social applications on the side, so it's a much more familiar experience.

Why do you think X2Engine makes CRM applications simpler?

For more on open source software

Read about the pros and cons of open source CRM software

See what Forrester has to say about CRM software products

Roberts: Over time, [many CRM] applications had become fat and bloated with functionality, and noisy to some degree. The core challenge to running an effective sales organization -- really focusing the applications on managing customer interactions and driving revenue and productivity -- I think is these huge SUV-style applications. Having a lighter, more focused and simpler application [is more] effective. [That is] really the opportunity I saw for CRM and where we spent the majority of time. It's really about keeping applications focused on sales operations and not just adding functionality to add functionality because it sounds cool.

What else is different about X2Engine?

Roberts: I think what's different about X2Engine is it's untraditional in terms of the application design. It's not a traditional sales, lead opportunity and contacts CRM model. You could [say it's all about] compacting the most efficient and the most salient points of the different modules into a more streamlined Salesforce automation system. The user interface is radically different. The data model is radically different. The Web technologies that X2Engine are written in are much newer. I think it's very much of an apples and oranges comparison between X2Engine and the traditional older-school, what I would consider bloated, CRM systems that are on the market today.

How do you win over companies that may be hesitant to invest in a new CRM system due to cost concerns?

Roberts: Four out of out five CRM companies all basically have very similar products, very similar model-direct user interfaces that look almost identical. But they're all very complex. That does work for a lot of companies, thousands, of course. But what I've seen is companies using one or two modules but paying for the cost of the full system. It's not that they're necessarily unhappy. It's just that their systems end up being more cumbersome. [We focused] on compacting the core modules into the contact record, so that you have your sales product extension in there. You have your correspondence engine in there. You have your intelligent lead routing and distribution rules going right into the contact record. By eliminating modules, we are creating a more efficient system.

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