SugarCRM Has a Sweet Quarter
Published: August 17, 2010
by Alex Woodie
While the vast majority of SugarCRM's customers don't spend a dime with the company, the demand for professional services and enterprise-level functionality was enough to drive a 50 percent increase in billings during the second quarter, the CRM software maker reported recently. What's more, the company reported that it signed more than 500 new paying customers during the quarter, mostly the result of its growing sales channel.
Few open source software developers ever succeed in "monetizing" their work. For every MySQL, JBoss, or Red Hat success story, there are a dozen software companies that dabbled with the commercial business model, and failed miserably. While SugarCRM is a private company that doesn't share its books, it would seem, by all appearances, that it will be considered among those that have succeeded with the commercial open source model.
SugarCRM reported 540 new paying customers during the second quarter, including such prominent names as Budget Rent-A-Car, H. D. Smith Wholesale Drug Company, and Hunter Industries. This brings the total number of paying customers to 6,000, according to the company.
The vast majority of SugarCRM customers pay nothing. The company reports that its free Community Edition is downloaded hundreds of thousands of time each quarter. Only a small fraction of customers fork over the $360 to $600 per user per year for the professional or enterprise versions, which entitle customers to technical support and advanced features like sales forecasting or a client that works when not connected to the Internet.
The company added 50 new partners during the first half of 2010. Considering that 70 percent of new SugarCRM billings stem from the work of its partners, things should continue growing nicely for SugarCRM, which writes its CRM system in PHP and supports it on IBM's IBM i platform, via the IBM i-based PHP framework of another Cupertino, California, company: Zend.
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