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SugarCRM CEO: 'In a way, open source and the cloud are the same thing'

Fresh off SugarCRM's annual customer and developer conference, CEO John Roberts discussed his company's progress and developments with mobile and cloud computing.

Four years after it was launched, SugarCRM now counts 4,000 customers of its commercial open source software. The Cupertino, Calif.-based company recently held its annual SugarCon conference for customers and developers. We caught up with CEO John Roberts, who discussed how SugarCRM is approaching cloud computing and open source applications in the cloud, mobile CRM, and the use of open source software in a recession.

John Roberts
John Roberts First of all, can you give us an update on the company?

John Roberts: It's kind of a surreal time in that things are going real well for us, but the world economy isn't doing so good. With all recessions, you get the 20% of companies that actually do incredibly well. For us, the global recession has really put a focus on two things. One is companies re-evaluating their information technology costs, and two, now more than at any time since the Great Depression, competitive advantage has been the most important thing for companies.

We're seeing a big shift here to commercial open source as a more efficient and innovative method [of delivering applications]. This recession is certainly highlighting our value proposition versus our competitors. We've seen our product surge since Q3 of last year. What do you see as open source's relationship to the cloud, and SugarCRM's relationship specifically?

Roberts: Sugar was born on the cloud. Everything from when we started four years ago with a small website that we rented for $25 a month and started posting code to, to our operating system, programming language and database -- it was all designed for the cloud. So the cloud really is built on open source. In a way, open source and the cloud are the same thing.

Today, SugarCRM is deployed on more than 55,000 servers worldwide and growing. Where are the servers? Those servers are in the cloud, they're not in local data centers. They're in all the cloud infrastructure providers from Amazon to Rackspace to British Telecom to IBM. They need applications, and SugarCRM is an application that runs basically on every cloud environment that is being built right now.

At the same time, we believe the maturation of the Internet to a cloud infrastructure, where you can run your application in the cloud but also have a choice of cloud providers, is a great advantage to customers in terms of giving them more control over systems architecture but also giving them more price control. I think the days of software vendors doing everything from the hardware to the software and building a 100% lock-in based model doesn't really benefit the customer anymore.

We view it as basically the customers' choice. They should evaluate the different cloud providers to find which one makes the most sense and have the ability to move between the different providers very easily. From a cloud perspective, we call it the open cloud. It's certainly a win-win. So, how much of your customer base is running Sugar in the cloud?

Roberts: Thirty percent of our revenue is from Sugar On Demand right now, our SaaS service. We have Channel partners that run their own cloud instances in different countries
around the world. We have a product for them called the Data Center edition that they use to run Sugar in the cloud themselves. How do you see Sugar's application connecting with other cloud applications?

Roberts: I think we're in this great environment in that, unlike lock-in based software, where those guys keep everything a secret in a black box, we have the opposite. We don't believe in scarcity, we believe in abundance. How does that translate into the cloud? That means you can run Sugar anywhere you want to in the cloud, but it gives you unlimited flexibility in connecting Sugar to different data services that are emerging.

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As a customer, it's great that you get these great data information services, and we're partners with a lot, including Hoover's, Jigsaw and LinkedIn, and others that are releasing their public APIs. At the same time, SugarCRM as a code base -- because it is open -- people are building all sorts of different cloud connectors to different information providers across the cloud. It really shouldn't be the software vendor that determines which information providers the customer can work with. What we're seeing now is this emergence of data sites. Some are coming from big corporations, but we're also seeing a lot coming from companies that were doing a lot of working in a certain vertical and as a result started collecting a lot of useful data about that industry, and they themselves are getting into the data information services game. That in itself is exciting, and for ourselves, as an open source provider, we're always going to embrace in our software instance a super-easy connection to these different data providers.

If you really want competitive advantage, you must have the best information possible. It's really in your best interest to work with any data provider that makes sense for your strategy. You made some mobile news at your recent developer conference. What's the status of mobile adoption within your customer base?

Roberts: Smartphones are certainly the wave of the future. We approach it in a number of ways. We have our native wireless interface and have added a lot of functionality in our 5.2 release, which we shipped in December -- full iPhone, BlackBerry and Windows support.

We're finally seeing the death of the fat client, or the death of the offline clients. The offline client is something that, for the last 15 years, a big part of CRM was data sync and being able to work with CRM data offline. It really has been a battle for all CRM companies to get databases to synchronize. Thankfully, we're in an era now where we have ubiquitous communication and broadband cards and laptops and smartphones, where you're really hitting a native application in real time. It's a nice trend of where we are in the industry.

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