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Chuck Schaeffer SugarCon 2012 Recap

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Business Execution, Sugar 6.5 & Guiding Principals Take Center Stage

SugarCon 2012—the annual SugarCRM customer, developer & partner conference—was held April 23-26 and brought together just over 1000 attendees from 23 countries to share this year's theme: Explore The Possibilities of CRM. There was plenty to talk about, but the top take-away messages that most grabbed my attention and forecast what we can expect to see from this company included the company's business performance execution, the release of Sugar 6.5 and the three underlying constructs that collectively set the vision and traverse through to the application design and value proposition.

Business Vision & Execution in Lockstep

IMHO, the SugarCRM of the last few years is not the same company as the prior SugarCRM. The company has evolved from an idealistic goal to make software open, extensible and free from vendor lock-in to a company that still achieves those goals while also achieving predictable business performance.

Sugar's vision is now matched by its business execution, and offers several impressive benchmarks to prove it.

  • Revenue growth maintained high double digit figures throughout 2011 and Q1 2012 began with triple digit growth.
  • In April 2012, the company secured Round E funding of $33M, bringing the total funding to about $80M. This gives Sugar very interesting possibilities as the company is already cash-flow positive. More coming here.
  • The ecosystem continues to gain traction. SugarCRM now has over 11M downloads, 1M users, 170K paid subscriptions, 30K registered developers, 1K projects on SugarForge, 400 VARs, 350 employees and contractors, and 100 products on the SugarExchange.

Sugar 6.5 Released

The newest Sugar 6.5 release includes an improved UI that will certainly lead to an improved user experience, enhancements to the SugarLogic studio, continued performance improvements and a full-text search engine powered by the Lucene-based Elastic Search open-source project. The search feature is delivered as a mashable framework so customers can replace or supplement their search repositories with additional search engines.

Sugar also now supports IBM's DB/2 database and extended its social networking and e-commerce reach with integrations to IBM's Connections, WebSphere Commerce and Sterling Commerce applications. Sugar can also be deployed on IBM's new PureSystems private cloud appliances.

User First

Sugar's User First is the first of three underlying principles that collectively aid the company's product strategy in terms of governance, value proposition and differentiation. This principal effectively visions software from the user up, not the executive down and is intended to resolve the decades old user adoption dilemma. The strategy examines role-based business processes and designs software to fit those roles and deliver the WIIFM (What's In It For Me) so that users actually want to use the software. User First is quite visible in the Sugar 6.5 release which sports a UI that clearly leverages consumer technologies such as crisp colors with high contrasts, intuitive navigation and extreme ease of use.

Open Cloud

Sugar continues to support customer choice when it comes to delivery models—be it on-premise, in a private cloud or in a public cloud. This last option of public cloud delivers increasing portability and investment protection. By supporting public clouds such as Amazon, Azure, Rackspace and others, customers are empowered to choose the cloud platform that best achieves their delivery goals (i.e. location/proximity, cost, uptime, SLA, security, etc.) and to switch cloud platforms if their goals change while taking their technology investment with them. Make no mistake, customers who choose to extend or create add-on developments in private cloud environments probably have no option to take those investments with them if they ever leave that cloud. Sugar's approach lowers both cost of entry and cost of exit, further contributing to the riddance of vendor lock-in.

Open Ecosystem

Hybrid channels are increasingly less common from cloud vendors. Sure, most cloud CRM vendors say they have a channel but those channels contribute a miniscule portion of the company's revenues and those publishers really don't understand how to effecively leverage a channel to scale. Sugar's channel is different, and is showing continued momentum in channel size, channel success and revenue contribution to the company. Check out these stats:

  • 15 partners with 300%+ subscription revenue growth
  • 30 partners with 200%+ subscription revenue growth
  • 70 partners with 75%+ subscription revenue growth
  • Partner-sourced deals tripled from 2010 to 2011
  • 50% growth in global channel subscription business
  • Top 10 Partners added 400 new customers
  • Signed distribution agreement with Ingram Micro

In all candor, I think the Ingram Micro partnership is a mistake. For over two decades countless CRM, ERP and other business application software vendors have forged reseller partnerships with all of the big distributors and I've never seen one be successful. Distributors are great at taking orders and distributing. However, they and their channels generally lack in the solution selling and professional services delivery that is required for business software systems. The Ingram partnership does indirectly add value to the all important IBM relationship, but frankly if that were the sole goal there would be better ways to achieve it. I hope Ingram and Sugar prove me wrong on this. I really do.

SugarCon End Notes

From the attendees perspective, the conference was an overwhelming success, and even introduced some firsts. Well in advance of SugarCon, session chairman Chris Bucholtz let the attendees crowdsource most of the session topics. While empowering customers to propose and vote for the sessions they are most interested shouldn't seem novel and unique, particularly at a CRM conference, it is. Odd as it may be, software publisher tech conferences have a heavy tendency to put their partners and paid relationships in front of customers irrespective of what customers want. Perhaps Sugar's customer centric approach will catch on. End

SugarCon 2012

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IMHO, the Sugar CRM of the last few years is not the same company as the prior SugarCRM. The company has evolved from an idealistic goal to make software open, extensible and free from vendor lock-in to a company that still achieves those goals while also achieving predictable business performance.

 

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