SugarCRM to open office in China

Open-source CRM startup SugarCRM Inc. is planning to open an office in Shanghai later this year to initial house 15 to 20 engineering and QA staff.

Open-source customer relationship management startup SugarCRM is planning to open an office in Shanghai later this year initially to house 15 to 20 engineering and quality assurance staff, according to the company's chief executive officer (CEO).

With more than 30 million companies in China, SugarCRM is also hoping the country will yield plenty of users for its software, John Roberts, SugarCRM co-founder and CEO, said in an interview Wednesday at the Open Source Business Conference (OSBC) East taking place in Massachusetts. So far, 30 percent of the startup's 300-plus customers for the commercial version of its software are outside the U.S., he added, with the product available in 25 different languages.

SugarCRM is receiving plenty of attention, not least for the nearly US$18.8 million the company raised last month in Series C funding. Roberts claims that the startup doesn't need the funding per se, but having a very healthy balance sheet provides added reassurance about the firm's longevity for Fortune 500 companies already using or considering deploying the commercial version of SugarCRM's software.

The 50-person startup makes about 75 percent of its source code available as open-source software, according to Roberts. Since SugarCRM debuted its Sugar Open Source Edition software in July 2004, the software has been downloaded more than 400,000 times. is the company's online development forum for the open-source software and as of Thursday has 2,800 developers working on 125 hosted projects based on the code.

Entering a market that had already been shaken up by hosted CRM (customer relationship management) player has made it easier for SugarCRM to compete with its own commercial open-source business model, Roberts said. "We're doing to what has been doing to Siebel," he said, adding that SugarCRM has picked up many former customers.

Roberts also tipped his hat to Oracle, which has already acquired one long-time CRM vendor PeopleSoft Inc. and is on track to finalize its purchase of Siebel Systems Inc. Those kind of moves often get customers thinking about migrating to other applications, and Roberts is seeing interest in SugarCRM particularly from Siebel users, he said.

"CRM has suffered from lack of adoption," Roberts said, suggesting that the traditional CRM software vendors sold systems to executives at companies, not to the rank-and-file sales, marketing and support professionals who'd actually use the products. Often companies invested in CRM, but employees didn't use the software, he said.

Roberts also pointed out the huge difference between the size of CRM software market in relation to the number of companies. "The market's very small," he said. "CRM companies have less than 10,000 to 15,000 customers each." He sees plenty of potential to evangelize CRM to organizations who haven't already purchased CRM software. The startup deliberately chose the name "sugar" to be seen as a friendly, nonthreatening, fun company to work with, according to Roberts. SugarCRM believes it's important to offer customization of its commercial software with a variety of themes so that employees can personalize the CRM software they're using, he added.

The next release of the startup's open-source CRM application, SugarSuite 4.0, is due out in December, according to Roberts. The company is on a three-and-a-half month release cycle, he said. The main focus of the upcoming version will be a new workflow engine, Roberts added.

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