SugarCRM – the Toyota Prius of App Software?

I just got back from a company-wide quarterly update meeting, and I come away with each of these with the same feeling of…WOW. SugarCRM is growing fast, we have a GREAT team in place, and the fun and energetic place to work results in a fun to use and very robust CRM platform.

SO it was funny to me to come back from such a meet, feeling so pumped up on SugarCRM, to see that Bernard Golden wrote in his blog about Marc Benioff breezily dismissing SugarCRM as a competitor at an event pitting Salesforce.com against SAP last night. (This is the safest “debate” I’ve ever heard of – a super-monolithic and weighty ERP giant versus a relatively lighter CRM application with an already outdated, limited deployment model.)

Golden makes some good points at the end of this paragraph:

Interestingly, someone from the audience (from McKinsey!) queried Benioff about competitive threats from open source, citing SugarCRM. Benioff rather breezily dismissed SugarCRM, stating that it’s an on-premise product, and the choice between it and Salesforce is a religious one — in other words, are you stuck with the old world view of hosting software yourself, or have you seen the light and are ready to move to SaaS? This despite the fact that SugarCRM offers its product in on-demand, and many service providers offer hosted versions of the open source version of SugarCRM. His rather haughty dismissal of SugarCRM reminded me of the kind of abrupt kiss-off Detroit used to respond to Asian car manufacturers — “they’re fine for people who want to drive cheap cars, but the main market is looking for big American vehicles.” Until they woke up one day and found that Asian manufacturers were eating their lunch.

I think Salesforce.com made a lot of money and has seen continued success being the Japanese auto makers to SAP/Oracle/Siebel’s being played as Detroit. But even Detroit has responded (finally) with energy-efficient cars, etc. I wonder how long it will take before Salesforce.com notices the chunks missing from their lunch…

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