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For all the news about the world's greatest open source Customer Relationship Management (CRM) application

SugarCRM Community Edition - a tale of redemption


I feel like I just discovered that my favourite old-time movie star became a broken, shambling, drink-soaked and bitter old person. It’s a time for remembering them as they were in their prime and for regretting that they never always shone as brightly as they once did.

I run a software consultancy and my broken, shambling old movie star is an open source software application called SugarCRM Community Edition. There was a period when it was one of the most used Customer Relationship Management applications globally. For about half a dozen years my company (SalesAgility), were one of the most active SugarCRM Community Edition consultancies in the world. We loved it and the love was reciprocated. We were active in the community support forums (in a community of half a million people, we were one of the five most active posters globally).

We wrote some great solutions for some great customers. We formed friendships with customers that endure to this day. We contributed code, bug fixes, time, ideas and passion to the project. We had customers from the startup to the enterprise and all points between. We travelled the world. We grew. It was hard work but it was open source and the possibilities were seemingly endless.

Then, in October 2013, SugarCRM announced that they were abandoning open source and Community Edition. Support would continue until an undefined date but there would be no more functional updates. They have now announced that date and it’s April 2017.

Today, some three years and a couple of months since that original announcement,   SugarCRM Community Edition, even in it's most up-to-date version, has multiple vulnerabilities. Vulnerability and static code analysis scans suggest that users should be very concerned. It’s going to get worse. As the software languishes, more vulnerabilities will emerge. Today, a smart attacker can compromise either the application, the server it’s running on, or both. Tomorrow, it will probably be easier to attack.

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SuiteCRM in 2017 and beyond

The traditional model for growing a global business includes acquiring and consuming your competitors. It’s a fast way to increase market share and decrease competition.

But what happens when you have a competitor that is fast consuming your business but can’t be acquired?

That’s the dilemma facing Salesforce, Microsoft, Oracle and the other major CRM vendors.

We did a quick calculation that SuiteCRM had created a $9bn hole in the CRM marketplace. As the article properly states, it could be more and it could be less. But what is certain is that the hole is growing and it’s growing rapidly.

Our aim is for 500,000 downloads in 2017. If each was monetised in the way suggested in the original article, that creates an $18bn hole. A very small portion of that sum makes its way back to the SuiteCRM projects through consulting, support and bespoke development revenues. Those revenues are invested in growing the development team and improving the product. Improving the product and growing the team means more software of a higher quality will be released as open source.

It’s a self-fulfilling prophecy. Increased downloads translates to more revenue that is invested in more software released as open source. This in turn leads to more downloads. It’s an upward vortex that is consuming the air that proprietary vendors breathe.

Traditionally there would be a swift end to this problem. Acquire SuiteCRM and shut it down.

But SuiteCRM is open source. It is a many-headed Hydra. If you cut off one head, another two heads will appear. The code will be forked. You can’t kill an idea.

Here at the SuiteCRM project we are naked in our ambition. We want to be the most deployed, most loved and most engaged CRM application on the planet. We will achieve that by adhering to our core belief that open source is in the best long-term interest of our customers and of the computer industry. We have pledged on countless occasions that every line of code released by the project will be open source and we are happy to restate that here.

Open source stimulates greater innovation for customers as budgets are freed from the heavy burden of costly licences. Open source stimulates higher quality software as tens of thousands of developers pour over the source code finding, reporting and fixing bugs. Open source creates greater ecosystem innovation as creative engineers have access to the source code and extend the functionality in imaginative ways that increase the attraction of the core product. The open source ecosystem based on open code and open standards naturally lends itself to self-reinforcing integrations so that SuiteCRM becomes a platform with integrations to the rich world of open source collaboration suites, ERP applications, marketing automation, billing and pricing, e-commerce and the myriad of other rich open source solutions that are emerging.

 The question many people will ask is “What’s in it for you?”.

The answer is simple. We’re growing a great company. It will never be a behemoth like Salesforce or Microsoft. The lack of licence revenue will ensure that. But it will create high quality jobs for thousands of software engineers, consultants, systems integrators, innovators and others. Some of these will be employed by the project. Most will be created in the greater open source ecosystem.

The SuiteCRM project is creating a different kind of company. We have a value system that is customer-centric. It is based on the understanding that open source creates companies that must have customer care at the centre of every engagement point. From consulting to support and everything between. We have a vision of 100% customer retention. Ultimately we won’t achieve it, it’s an impossible dream. But the values that sustain the vision, uphold the service levels we deliver to our customers.

Dream big, think long-term.

I’ll conclude with my favourite quote of the year, from a biography of Ghenkis Khan:

“Move with haste. Slowly”.

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The Forrester Wave CRM report and why you can’t trust it

This morning, my Linked in folder contained an email from Bpm online offering me a free copy of Forrester’s Q4 CRM Suites for mid size companies. According to Wikipedia, Forrester is “an American independent technology and market research company that provides advice on existing and potential impact of technology, to its clients and the public”.

I have very strong reservations about these “independent” technology research companies. Forrester is the smallest of the three major firms (Gartner & IDC are the market leaders). High on the list of criticisms of all three is the opaque link between their commercial relationship with the companies they review during their “independent” research and the resulting review. Put bluntly, it has been suggested that the more money that a vendor spends commissioning “independent” reports, the higher their eventual review score are likely to be.

They also have a history of getting it spectacularly wrong. Gartner, in 2006, stated that “Apple should quit the hardware business”. How did that particular bit of advice work out?

Enough about my cynicism of about “independent” research firms and onto the Forrester report. Neatly titled “Forrester Wave: CRM Suites for Midsize Organizations, Q4 2016”, it contains 36 pages of research focused on “11 CRM solutions worthy of consideration by midsize organizations”.

It contained all the usual suspects – Salesforce, Dynamics, Oracle, SAP etc. It did not contain SuiteCRM. No surprises there (even though SuiteCRM is among the most deployed CRM solutions globally). We don’t commission any “independent” research from any of these firms.

It did however contain SugarCRM. It was at this point that my jaw dropped a little.

Before I explain why, just consider that these research companies position themselves as authoritative experts. They “research” using some of the finest minds in the industry in order to produce high value trustworthy output. That’s the theory anyway.

So, onto the SugarCRM part of the report. It starts: “SugarCRM’s open source model — unique among vendors we evaluated”.

Hold it right there. There were 5 analysts working on this report and reports are apparently peer reviewed before being released. And yet they still produce rubbish like this. It is three years since SugarCRM abandoned open source and this report states that their open source model is “unique”. There is nothing open source about SugarCRM’s model. They are a run-of-the-mill proprietary vendor.

They did produce one sentence which I wholeheartedly agreed with. In the preface they stated:

“The landscape of CRM solutions has matured and converged as a result of merger and acquisition activity. These vendors offer solutions replete with features and functions. Every vendor can just about tick every box”.

Which summarises quite neatly the SuiteCRM proposition. When “every vendor can just about tick every box”, we’re in commoditised business logic territory. Customers can acquire any one of these CRM applications confident in the knowledge that they are paying to enter the walled garden of proprietary vendor lock-in.

Forrester and the other research companies need to wake up to the fact that the world has moved on from their world view of proprietary and predatory software vendors. Today’s customers have the choice of engaging with open source solutions like SuiteCRM that are replete with features and functions that can just about tick every box. They choose to do so in increasing numbers.

As the business leader at one of our large globally-scaled customers said, “SuiteCRM is a game changer”. What he meant was that he was able to acquire enterprise-class CRM business logic, deploy to his own infrastructure, modify the application to suit the business processes and have complete control over every point of the lifecycle. They don’t pay any license fees, they enjoy a close and supportive relationship with the SuiteCRM project and the cost of their 800 seat global deployment is staggeringly low. Greater control, complete freedom, great software, access to the source code and world-class vendor support.

Now, that’s unique and that’s game changing. It’s a box no other vendor in the Forrester list can tick.

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The 9 billion dollar hole in the CRM market and how we caused it

I have no way of measuring accurately the veracity of the $9bn figure above. It may be more than $9 bn. It may be less. I am happy to share how I arrived at it.

SuiteCRM is a completely free open source, enterprise-class CRM. In the last 12 months SuiteCRM project has enjoyed more than 240,000 downloads directly from the project website.

What we cannot tell is what happens with those downloads.

Is one person downloading SuiteCRM 1,000 times and distorting the figures up?

Or is one person downloading SuiteCRM once, deploying it 1,000 times and distorting the figures down?

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SalesAgility and Apperta release SuiteCRM NHS Edition

Today SalesAgility and the Apperta Foundation announced their partnership to deliver SuiteCRM NHS Edition. Based upon the award winning open source SuiteCRM application the enterprise ready CRM application is now available on the Apperta Github for general use across the NHS, Local Authorities , health and care related sectors.

Led by clinicians, the Apperta Foundation is a not-for-profit, non-dividend paying Community Interest Company that brings open products and services to market that truly transform the delivery of care for professionals and people.

Bill Aylward, Chair of the Apperta Foundation CIC commented “The partnership between SalesAgility and Apperta will ensure that NHS organisations can quickly and effectively deliver an out of the box, highly functional, open source CRM solution.”

SuiteCRM is an award-winning enterprise-class, powerful, customisable, free and open source Customer Relationship Management (CRM) application maintained by SalesAgility. Some of the world's largest companies are choosing SuiteCRM in preference to the last generation of applications. SuiteCRM delivers the same functionality with greatly reduced deployment costs and as every line of code is open source its completely free to use. SuiteCRM won the BOSSIE Award in both 2015 and 2016 for the world's best Open Source CRM

Based on the most recent version of SuiteCRM, the SuiteCRM NHS edition is fully customisable to suit the needs of any individual health organisations and departments. The application is open source and so is freely available to download, distribute and modify, without any charge, saving thousands on users subscriptions which are charged by most CRM applications. SalesAgility, the authors and maintainers of SuiteCRM are G-Cloud 8 approved suppliers.

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I am right and you are wrong

I have been working my way through a problem that has nagged at me for about eight years.

There’s a bit of Kübler-Ross about this particular question: “Can the open source business model ever work without compromise?” There are 5 stages of Kübler-Ross. I have been through every one apart from the fifth stage: Acceptance.

At every phase I have been faced with “conventional” wisdom, “learned” articles, “authorative” voices. All of whom posit that open source is doomed unless it assumes the practices of proprietary software. In order to succeed, open source has to become “proprietary-light”. It has to put value behind paywalls.

For the most part, these are American and British voices. The consumers of, and adherents to, the trickle-down, Chicago School of shareholder capitalism.

I have been trying to resolve my business model ambitions through their prism.

The penny (centime, lepta) dropped this evening.

If the argument about business models was re-framed through the prism of new economics, what would it look like?

By “new economics” I mean a return to capitalism that measures value by return to society (especially business as a society), not one that measures value by returns to shareholders. So, to the many, not to the few.

My focus is more on: What if we reject that Chicago School value?

What if we framed the model differently?

Here’s my take on it and my ambitions for SuiteCRM.

We don’t want to become a mega corporation. We do absolutely want to be the biggest CRM application on the planet. I make no bones about the scale of our ambition.

The two are not mutually indivisible.

We won’t put any code behind paywalls. We will be a services business. We don’t want to earn money from commoditised business logic. That path holds little value for customers. Hundreds of companies modelling the same business processes, trying to pass products off as unique and tying customers into vendor lock-in arrangements is questionable value to end-users.

By now the Chicago school guys are falling off their chairs laughing.

But, I’m not finished yet.

Building open source software in a community challenges a fundamental concept of the Chicago School model – the concept of “us” rather than “me”.

An engaged community of hundreds of thousands of contributors (Linux), will always, with the correct governance, build better software than conventional software companies (Microsoft Windows). I’m not going to spend any time labouring this point: If you don’t accept it, I can’t help you.

The same applies to CRM.

Before you start getting on your high horses, this is not Socialism. This is raw capitalism. We want to be the number one CRM company globally. We want to put Salesforce out of business, diminish Microsoft’s CRM practice and make the myriad of “me too’s” irrelevant.

But it’s new capitalism. It’s the capitalism of the community. It creates value for the customer, the  employees and the community. It’s a capitalism that rejects shareholder value as it’s primary concern and replaces it with customer value and customer choice in a world where vendor lock-in dies.

It’s a world where $100m salaries are a thing of the past. As someone that wouldn’t know what to do with $100m in a lifetime, never mind a year, that does not upset me.

So, after ten years, my Kübler-Ross “acceptance” is resolved.

I reject it. Software is consuming the world and open source is consuming the software world.

Within that framework, different business models, workable and profitable business models are emerging.

Get used to it.

I’m not the brightest star in the firmament. I gnaw over problems. I value the opinions of people that think differently to me.  This one has taken me ten years to resolve.

Thank you to everyone who has disagreed with me in the past. But I am right and you are wrong.







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SuiteCRM retains its open source CRM crown for IDG's InfoWorld Bossie Awards

SuiteCRM retains its open source CRM crown for IDG's InfoWorld Bossie Awards

Companies around the world rely on technology to enable and enhance their business operations and deliver on their business strategies. The annual InfoWorld Bossie Awards recognise the best business-oriented open source software products around.

SuiteCRM are delighted to be included in this esteemed list of organisations by retaining its title of The Best of Open Source Applications for CRM for the second year running.

With the recent release of a new UI, transforming the look and feel of the application and with the introduction of new features and  enhancements, this award stands testament to SuiteCRM’s ambition to drive,  innovate and extend its open source application.

Doug Dineley, Executive Editor, of InfoWorld commented  “InfoWorld's 2016 Bossie Award winners show that open source continues to lead the way in every corner of computing. Among our 72 winners you'll find not just the best open source projects, but the best software period. These are the tools that are changing the way companies build applications, operate their datacenters, and run their businesses.” 

The Bossies best open source application CRM crown had previously been dominated by Sugar CRM, however as they now concentrate all their efforts on their commercial proprietary editions, SuiteCRM have taken over the responsibility for driving innovation within the open source CRM solutions marketplace.

Greg Soper CEO SalesAgility who are the authors of SuiteCRM commented “I'm delighted that SuiteCRM has won the BOSSIE for the world's best open source CRM for the second year running. The credit for this goes to the great team of Engineers and Architects at SalesAgililty and to the community of users and developers who engage so readily with the project. We have ambitious plans for SuiteCRM for the next 24 months and we'd love to make it a hat-trick of BOSSIES in 2017.”

SuiteCRM is an open source, enterprise ready CRM solution freely available to download, distribute and modify. Its aspirations are to further establish itself as a major global player within the CRM marketplace by going head to head with some of the largest corporate machines in the world. It has already establish a loyal and dedicated English and German community forum with plans to extend coverage to more languages over the next year.

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Review of Year 3

Wow, how did that happen? We forked SugarCRM Community Edition in October 2013. We're rapidly approaching 3 years of solo flying and the months have passed in the blink of an eye.

As has become my practice, it's time for a review of the year.

It's worthwhile stating why we do this. It's relatively simple. CRM has the capability to transform an organisation's operations. We're passionate about doing that. A well implemented CRM application should be one of the most important business applications that a company operates. It should be a catalyst for efficient operations and meaningful business insights that drive strategic decision making.

The world of CRM is littered with failures. CRM fails more often than it succeeds. Many CRM applications are little more than standard out-of-the-box implementations that are not aligned with business operations.

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Is the game changer the beginning of the end for Salesforce?

We asked one of our larger clients (800 users) for a short testimonial that could be used on our new website. I loved one bit of his response in particular:

"I think everyone who gives this product a thorough check will understand that SuiteCRM is a game changer in this market"

I don't think he's wrong. When you stack this with Gartner starting to wake up to open source (at last), albeit they still have their heads in the infrastructure stack. Add to it the number of enquiries the SuiteCRM project is starting to get from the large consultancies and from large and medium enterprises (all core Salesforce territory), then something profound is starting to happen.

Look at the following two extracts from a recent Gartner report on Relational Databases (they're endorsing something most of us have known for at least 10 years). When you're looking, replace RDBMS with CRM. We are not suggesting that Gartner is endorsing our view, but we are firmly saying that the extracts can validate CRM in equal ways.

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Diligent launches SweeterSync, an Exchange-Server software for SuiteCRM

Diligent Technology & Business Consulting is an international software consultancy firm with headquarters in Frankfurt and Budapest. They have taken their combined 80 years experience and created a server side synchronisation between SuiteCRM and Microsoft Exchange-Server called SweeterSync. It has been designed with simplicity in mind and so it requires the minimum of effort to operate and doesn’t need any installation on the client side. SweeterSync also comes with a 30 day free trial giving you an opportunity to see how invaluable it is before you have to pay anything.

 

Sascha Krause, Managing Director of Diligent said “SweeterSync is an invaluable tool for anyone who uses SuiteCRM and Exchange-Server. It’s really simple to manage with no client side plug-ins necessary. It supports all Microsoft Exchange-Server versions from 2007, Microsoft Office 365, Microsoft Outlook email applications and also mobile devices. No matter the size of your business or your requirements, SweeterSync makes data synchronisation on your Exchange-Server simple. It’s also a much cheaper alternative to competitor products such as Riva’s Exchange integration.”

 

SuiteCRM is an award-winning enterprise class, powerful, customisable, free and open source Customer Relationship Management (CRM) application maintained by SalesAgility. Greg Soper, CEO of SalesAgility commented “the Diligent team are a long-time and highly respected SuiteCRM partner who have produced some really amazing add-ons and customisations of SuiteCRM. I think this product has so many benefits for thousands of our users and will be an invaluable resource for our clients looking to synchronise with their exchange email client. We are so pleased they decided to invest the time and effort into developing such a great add-on for our users.”

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How to negotiate seriously large discounts from Salesforce

 We're now starting to collect enough evidence to suggest that when Salesforce is competing against SuiteCRM, they embark on a three phase strategy.

They know that SuiteCRM is a serious competitor. They have lost several large-scale enterprise-class, global projects to SuiteCRM in the last 12 months. One of these in particular, would have been north of $30m in value.

As a CRM buyer, you can use this to negotiate substantial discounts from Salesforce. You need to get through each phase to get to the pot of gold at the end of the rainbow. We've made a short list of suggested responses for each phase.

Your starting point should be to tell Salesforce you have a short list of them and SuiteCRM. You can expect a variation of the following:

Phase 1 – Uncertainty

Salesforce response

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10 ways a CRM can make your business more efficient

I would hazard a guess that by now most people know that CRM technology is a  critical business tool. However I don't think many people are aware of the wide range of functionality a CRM has and just how much more efficient it can make your business. I don't know if there is another business-related technology that's as versatile and beneficial as CRM.
Despite this, most businesses fail to use their CRM to it's full potential. Businesses tend to only use a few functions, missing out on the huge benefits it can have throughout a company.

Here are 10 ways a CRM can make your business more efficient:

1.  Understanding your data

Any business in this day and age is bursting with data, a CRM will allow you to manage it effectively even if you have far too much fragmented data coming from various departments.  A CRM system helps you to make sense of this, it is connects you and your team to a central database making your data actionable throughout your company.

2. Make the most of your data

Another key aspect of a  CRM is that it will help you get the insights you need to make the most of your data. For example, which accounts are currently dormant? A CRM system will allow you to schedule activities to re-activate stagnant accounts. Without these insights, you and your team are missing opportunities and not utilising your data effectively.

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Are you a CRM leader or a follower?

Most people, and I'm afraid that probably means you, are followers. That doesn't mean you should stop reading this article.

Leadership qualities and job titles are not easy bedfellows.  Most people in leadership positions are  there because they possess great skills. They’re master administrators, team builders, perceptive, communicators, adroit politicians, great negotiators or, as is sometimes the case, simply have  louder and more aggressive personalities.

Many are risk takers. They take the right risks at the right time. They know how to assess risk. They run the scenarios that help them make better decisions. If you're not a risk taker then you may be a manager, not a leader. Great leaders innovate. Business as usual is not a recipe for success in the long term. New markets, new products, new process, new cost and efficiency gains. The key word is new and new always has risk. If you don't innovate you will die. It might be a slow, lingering decline simply because your core business is threatened by new technologies and you didn't innovate quickly enough or well enough. Think of digital photography's impact on Kodak. They had decades of warning and failed to take the correct risks. A failure of leadership ultimately.

The decline could be more rapid. A new entrant in an existing market. Apple and Android's impact on Nokia is a fine example. They had a window of opportunity to innovate to compete. They were so confident of their brand that they didn't innovate hard enough, fast enough or well enough. If they had run the right risk scenarios they would have known that an open source smartphone was a game changer. Their decline will be a case study for college kids for decades to come.

And so it is with open source in the application stack. It’s not a follower’s proposition. Followers will buy Salesforce and Dynamics. No risk there apparently. Just the requirement for very large budgets and the willingness to cede regulatory control to omnivorous vendors with a track record.

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SuiteCRM in the Next 10 Years

As we approach the ten year anniversary of SalesAgility as an open source consultancy focused on CRM, I want to reflect on the our past and our future.

SalesAgility started life as a one person company in 2006. From the get-go we were focused on open source CRM. Our platform of choice was SugarCRM Community Edition. Like many startups, passion rather than abundant cash was what sustained us. We grew slowly but surely. We generated a regular cash stream from a series of extensions to SugarCRM that we developed, sold and published as open source and engaged globally as a centre of excellence for innovation on the core Community Edition. We worked with large companies and small ones. It's fair to say that we had rather more of the latter than we did of the former. Regardless, we kept the lights on. We were active and vocal members of the fantastic community that SugarCRM attracted. By 2013 we were an eight person company.

In October 2013, in a blog post on the company website, SugarCRM announced that they were done with open source. They had come to the conclusion that their future was in proprietary software.

This was poorly received by the community in general. It generated much heat, little light and one important consequence – the launch of SuiteCRM as a fork of Community Edition.

Since launching SuiteCRM, we've grown to a thirty person company and are still growing rapidly. We have managed to attract and retain a great team of software engineers, architects and consultants. We are engaged in multi-year projects with large corporate companies and NGO's. The revenue from these projects funds the ongoing development of SuiteCRM. The community surrounding SuiteCRM is growing rapidly and this is source of great pleasure.

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SuiteCRM and Linux share a common experience

There's a widely held misconception about open source software (OSS). It's commonly believed that OSS is primarily developed by amateur hackers sporting beards and sandals, coding late into the night and contributing random lines of code of variable quality to disparate projects as their prejudices and whims dictate.

Nothing could be further from the truth. Linux is a great example of how open source is developed. The Linux Foundation, in their 2015 “Who Writes Linux” report suggested that a conservative figure for the number of people who are paid to make contributions to the kernel was 80%.

Linux is probably the most deployed operating system in the world. From mission-critical servers for the world's largest corporations to Android on mobile phones. It's widely used because it's cheaper, more secure, more stable and more performant. In the web server market, OSS operating systems dominate at around 70% and growing. In mobile, Android (Linux) has over 70% share and growing. In the application server market Microsoft in 2012 plummeted below 20%. It has since recovered to around 30% although commentators speculate that it's Microsoft's own servers that have led the recovery (the servers they use for their web applications) rather than the mass market consuming Windows in larger quantities.

In effect, OSS that is free to acquire, deploy and modify, is built and maintained by people who do it for a living. And the software they write dominates the markets they operate in. These highly talented, well-paid people mostly work for large corporations. The biggest contributors to Linux included IBM, Intel, Google and Samsung. How long before we see Microsoft in that list? That's not a trick question.

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Univention App Catalogue

SalesAgility launches open source SuiteCRM app with Univention and Digitec

SalesAgility are delighted to announce a collaboration with Univention to launch SuiteCRM, the open source Customer Relationship Management application in the Univention App Center.

Univention Corporate Server (UCS) is a widely deployed open source solution that enables customers to deploy secure and unified web applications either locally (on-premise) or in their favoured hosting environments such as Amazon Web Services plus numerous other large hosting providers.

The substantial advantage of UCS over single deployment stacks like Bitnami on Oracle cloud is that it brings directory services as a core function. This means that customers can deploy the business applications they need such as CRM, ERP and Document Management as well as controlling access and security to them from a central point. Users benefit from a single sign-on to all applications they have permissions to access which support the SAML technology. This greatly reduces complexity and improves security for systems administrators in small and medium sized businesses.

Nico Gulden, Product Manager Univention said "SuiteCRM extends the choice among customer relationship solutions in the App Center for our users and allows a better match making for their customer requirements. We are happy to win with SalesAgility, another international software partner for our App Center and a new quite interesting solution for all UCS users."

SuiteCRM is an award-winning enterprise-class, powerful, customisable, free and open source Customer Relationship Management (CRM) application maintained by SalesAgility. Some of the world's largest companies are choosing SuiteCRM in preference to the last generation of applications like Salesforce, SAP, Siebel and Microsoft. SuiteCRM delivers the same functionality with greatly reduced deployment costs and total cost of ownership (TCO) and it's completely free - every line of code is open source and always will be. SuiteCRM won a BOSSIE Award in 2015 for the world's best Open Source CRM.

Greg Soper CEO SalesAgility commented "we've admired what the Univention team has been doing for a few years now so it's a real privilege to be part of the family of products available on the platform and we look forward to a long and successful relationship with Univention and their clients."

SalesAgility also recognise the excellent work undertaken by Digitec who built and configured SuiteCRM for the App Centre. Digitec have been developing software for more than 30 years and is a leading provider of solutions in the area of trading in financial instruments. Their core products cover MM/FX pricing, trading and settlement.

SuiteCRM in the Univention App Center is available now to download

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The Salesforce Chimera

We've always been a little cynical about Salesforce's business model. We don't think it's sustainable to keep delivering ever more expensive software at a loss when the market is being eroded by free and open source software. One thing we're not is financial analysts, but fortunately we know people who are. A good friend of the company sent me the following article, which is very interesting (attributions at the foot):


 

My favorite example of a “story stock” is Salesforce.com (ticker CRM), a $55 billion market cap technology company with 19,000 employees and about $6.5 billion in revenues. I’m pretty sure that Salesforce.com has never had a single penny of GAAP earnings in its existence (in FY 2016 the company lost $0.07 per share on a GAAP basis). Instead, the company is valued on the basis of non-GAAP earnings, but even there it trades at about an 80x multiple (!) of FY 2017 company guidance of $1.00 per share. Salesforce.com is blessed with a master story-teller in its CEO, Marc Benioff, who – if you’ve ever heard him speak – puts forth a pretty compelling case for why his company should be valued on the basis of bookings growth and other such metrics. Of course, the skeptic in me might note that it is perhaps no great feat to sell more and more of a software service at a loss, particularly when your salespeople are compensated on bookings growth, and the cynic in me might also note that for the past 10+ years Benioff has sold between 12,500 and 20,000 shares of CRM stock every day through a series of 10b5-1 programs. But hey, that’s why he’s the multi-billionaire (and a liquid multi-billionaire, to boot) and I’m not. Here’s the 5-year chart for CRM:

 

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Open source is the ice age for proprietary CRM vendors

In ten years open source will be the norm for CRM. Dinosaurs like Salesforce, Microsoft, SAP and Oracle will not exist in the form they currently do. They will have to change business model profoundly or they are roadkill.

The SuiteCRM project is the 800lb gorilla in the open source CRM world. The project goes from strength to strength. New engagements are primarily enterprise global and strategic. This is traditional dinosaur territory and the bad news for dinosaurs is that the enterprise is waking up to the open source CRM landscape. Faster, cheaper, better, more innovation at a faster pace and a vastly reduced price tag for enterprise-class CRM.  And all of this with no vendor lock-in and control of their own landscape. They can deploy to public clouds, private clouds, behind their own firewalls. They control their upgrades, they call the shots.

There are dinosaur world people who comfort themselves and scare customers with the story that open source is written by script kiddies working at night in their bedrooms. Just for you, we have some very, very bad news. Those global enterprises currently engaged with the SuiteCRM project  understand that what is good for the project is good for them. They are donating code to the project. They have their own teams working on innovations and are donating these to the project. It's not script kiddies working in their bedrooms (it never was), it's some of the smartest corporate software minds innovating on a high quality code base and donating code that doesn't impinge on their competitive advantage back to the project. We're all floating higher on a rising tide.

Not only is the enterprise donating code, but the SuiteCRM full-time core product team is expanding – rapidly. The community of developers that support SuiteCRM is expanding. The quality of the community is growing and the number of bug fixes and other contributions is picking up pace. More eyes on more code, more innovation from more software engineers. It's hugely exciting.

The dinosaurs should be very afraid. Extinction is a near certainty unless they adapt. It's a Darwinian evolution. The survival of the fittest and open source is the ice age for proprietary CRM vendors.

Just as dinosaurs didn't adapt to ecological change and were wiped off the planet, it is difficult to see how their twenty first century proprietary code cousins can adapt. Just as dinosaurs needed vast quantities of food to survive, so do their code equivalents. Cash is their food equivalent. Code dinosaurs need lots of cash food regularly. They have very, very expensive sales and marketing teams to support. They could cut these teams and reduce their overheads substantially. But this would be a death knell. Without those teams of highly remunerated marketing and salespeople, they don't have a route to market. Those sales and marketing teams are the major differentiator between open source and proprietary software. The business logic is commoditised. Proprietary and open source CRM at enterprise level do pretty much the same things.

The difference between open source and proprietary software is that open source CRM is generally bought by the enterprise. They download it, deploy it, run code scanners on it, road-test it and satisfy themselves that it is fit for purpose. Then they engage with the project. They buy into it before it is sold to them. No salespeople are involved.

Proprietary software on the other hand is sold. Costly marketing to promote the message and sharply dressed sales teams with great collateral to close the deals. Code dinosaurs can't survive without the sales and marketing overhead.

Alternatively they could open source their code base. This is an interesting thought and one that may happen. But the consequences will be profound. Red Hat's CEO, Jim Whitehead, articulates the open source business model beautifully. It's “millions of users and thousands of customers”. Only a fraction of the people who download, deploy and drive value from open source applications will ever become customers that provide revenue to open source projects. For that reason open source companies tend to be lean organisations with engineering and business process at their core. Could a CRM vendor such as Salesforce or Microsoft survive in any meaningful way if users could simply download all the code and use it as they wish. Rather than the 100% monetisation that they currently enjoy, their core revenues would shrink to a fraction.

It's possible but the likelihood of the dinosaurs surviving such an impact is small.

It's the agile, smaller mammals that will survive the ice age. Those that don't have the bulk of the dinosaur's business model.

If you're an engineer or business analyst working for a dinosaur and you're reading this with a sinking feeling, then don't be too disheartened. There will still be lots of consulting and engineering jobs in the open source sector. If you're in sales and marketing, then maybe you should worry a bit more.

The future for CRM is bright and it's brightest in open source.

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It's peak CRM and I'm worried about Salesforce

I don't have any shares in Salesforce but if I did I'd be dumping them.

We're rapidly approaching peak CRM as far as Salesforce are concerned. They are making a huge investment in Europe. They hope this will give them new momentum. As they will discover, Europe is a different market to the USA. Culture, privacy and security are approached very differently in Munich and Amsterdam than they are in New York and Chicago. If they are looking at Europe as the new frontier to maintain their stellar growth, they're likely to be disappointed.

In Europe they are also faced with the world's most popular open source CRM. SuiteCRM is a European based project. The project's people spend a lot of time in the airport lounges of the major European cities between visits to the ever increasing customer base of globally-scaled, enterprise-class organisations who have opted for SuiteCRM in preference to Salesforce.

Functionally, SuiteCRM is as rich as Salesforce Enterprise. That it costs a fraction to deploy and maintain goes without saying. That there is no vendor lock-in is a major attraction. That the consulting and implementation services meet the needs of the enterprise helps. Big business has a simple choice - expensive and proprietary or reasonable and open source. Increasingly the big beasts of business in Europe are declining to engage with the big beast in CRM. They're choosing open source.

Increasingly the big beasts in Salesforce's home market are reaching the same conclusion and questioning the value that they get from a very expensive application.

The glory days are over for Salesforce. CRM is commoditised business logic and the market is starting to understand that.

In 10 years, open source will dominate the application stack in the same way that it does the infrastructure stack and where does that leave Salesforce? They have bet the bank on continued 30-40% year-on-year growth and eventual world domination at an unfortunate time. They're prepared to tolerate continual losses in order to achieve the goal. The timing isn't great and the stars aren't aligned.

Anecdotally, we hear of cannibalisation of the existing customer base. Faced with a sluggish growth market, one of the available methods is to turn up the heat on the existing customers in order to keep revenue growth on forecast.

No further comment required.

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Open source CRM projects are more likely to succeed than Proprietary CRM projects

This is one of those no-brainer statements.

Consider a house refurbishment project. You have a budget of $100,000.

Before you start refurbishing, you have to pay a refurbishment license of $70,000 to the state. It's a tax.

You now have a budget of $30,000 to complete your refurbishment.

Good luck with that.

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