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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?

We have no way of knowing. All we know is 240,000 downloads. There could be ten million deployments or there could be ten thousand.

To add to the uncertainty, there are many other ways of acquiring SuiteCRM other than downloading it from the project site. These include vendors such as Bitnami where users can download a complete SuiteCRM stack, pre-configured and ready to go. There’s also Microsoft's Azure cloud where Bitnami has partnered with Microsoft to make SuiteCRM available, and Amazon's Elastic Cloud where a couple of clicks launches a fully configured instance of SuiteCRM. There are also many other smaller vendors offering similar services.

To keep it simple, we'll use the known 240,000 downloads from the project website as the baseline figure.

The next difficulty is how to estimate an impact cost. To arrive at that we need to compare ourselves to another CRM product.

The obvious benchmark for SuiteCRM is Salesforce - the 800lb gorilla in the CRM market. Point by point comparisons are a fool's game, tiresome and of limited value.

For the sake of this article, accept the following as true: There are core functions that every enterprise-class CRM applications is expected to deliver. Both SuiteCRM and Salesforce deliver all the expected core functionality. Both SuiteCRM and Salesforce have richness and refinement within that functionality.

SuiteCRM easily surpasses the Professional Edition of Salesforce for functionality and has none of the restrictions that apply to this entry level Salesforce version.

So, we’ll use Salesforce Enterprise Edition as the benchmark. License fees for Enterprise Edition are £120 per user per month in the UK.

We’ll also use 20 users as the average number of users for each SuiteCRM deployment.

To get the figure of $9bn we do some simple math:

#SuiteCRM downloads per annum*value to Salesforce if they were all Salesforce customers

A 20 user instance would earn Salesforce £28,800 per annum

240,000 additional customers of 20 users would earn Salesforce £6,912,000.00.

Convert to dollars and we arrive at approx nine billion dollars.

Yes, there is a lot of speculation and conjecture in these figures and much margin for error. They’re pretty meaningless except as a guide to the future.

If there is conjecture, there is also some certainty. What is absolutely certain is that some of the world’s large corporations have chosen to forego spending on licences for commoditised business logic and chosen to invest in enabling true innovation though open source SuiteCRM. Their investments are being used to closely align software with business process, to drive competitive advantage, to engage consultants to drive the highest quality implementations, to put CRM on every desktop where it could drive value, to do many of the things that exorbitant license fees per user made impossible previously.

What is also certain is that SuiteCRM is one of the most deployed CRM applications in the world with growth figures that many vendors would kill for and a client list that is as impressive as it is surprising.

What is also certain is that this is game changing. There is no global behemoth behind SuiteCRM. There’s a huge community, currently standing at 35,000 collaborators and a growing number of core developer contributors. There’s the project’s core maintainers at SalesAgility, an ISO9001/27001 software consultancy. There’s a growing network of accredited partners. There’s a growing skills base that understands how to extend SuiteCRM. There’s global 24/7/365 support available. It’s here, it’s not going away and it’s growing very, very rapidly.

This is the future today. All the attributes of the major vendors but none of the frustrations. Agile, lower cost, complete freedom, more innovation, higher quality, open source and free.

Open source dominates the infrastructure stack. There aren’t many proprietary vendors left standing and most of the innovation is coming from open source.

SuiteCRM is pointing the way in the application stack. It’s not a matter of “if”, it’s a matter of when open source CRM is the dominant force.

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Wednesday, 22 November 2017
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