Linux Takes On Salesforce.com

Look out, Salesforce.com. The chief proponent of software-as-a-service has paved a path as the premier CRM vendor, leading an on-demand blitz that's striking fear into the hearts of the channel. Now that strategy is getting some traction in the Linux front from scrappy upstart SugarCRM, which is based in Cupertino, Calif., and has been in operation for less than a year.

SugarCRM just launched its own online CRM offering for $40 a month. Dubbed Sugar On-Demand, it's a Linux-based, Web-hosted version of the company's Sugar Sales Professional CRM application, aimed specifically at SMBs.

"There is definitely a market out there that wants to have CRM, but doesn't want the IT infrastructure or doesn't have the financial resources to get CRM installed," says Tara Smith, SugarCRM director of marketing.

The program is also notable because it's based on open-source LAMP software technology. (LAMP is an acronym that stands for the Linux operating system, Apache Web server, MySQL database, and PHP or Perl scripting languages.) Indeed, SugarCRM claims its product is the first customizable, commercial open-source CRM service that's being offered via Web hosting.

Along with Salesforce.com, Smith says the company hopes to draw business away from competitors, such as Siebel, SalesLogix, Goldmine and Microsoft's CRM product.

Although selling hosted software services seems to be the next big thing, for VARs the trend is disruptive, because on first glance it seems like it leaves them out in the cold. But that doesn't have to be the case, Smith explains.

"Since we're open source, we have to encourage partnerships," she says. "We will always make sure there's a partner program so that customers who use resellers or other hosting providers are aware that they're approved by us."

Specifically, SugarCRM is encouraging partners to resell its Professional hosting offering; however, the company retains the license to the code, and the hosting is tied to its own Web site. One of the first partners to sign on is CRMCentric, a solution provider in Kensington, Calif.

"We see a lot of opportunity in the SMB market," says Lisa Cain, a principal at the firm.

For potential partners or users who want to try SugarCRM's software without making a commitment, the company is offering a separate, fully open-source version of its software, which can be downloaded for free from www.sugarcrm.com.

SugarCRM also has announced a third marketing thrust, in the form of a turnkey hardware/software bundle that's sold direct. Called the Sugar Cube, it's a standalone, rack-mounted server that comes preloaded with software and is ready to be plugged into the network.

"That's going to be satisfying to the niche of people who don't want to do a hosting program, and don't want to deal with the installation and deployment headache," Smith says.