SugarCRM: Opening up the source to SaaS

Open source and SaaS are bosom buddies in some ways, but diametrically opposed in others. SugarCRM is bridging the gap between the two.

I've long said that open source and Software as a Service (SaaS) are bosom buddies. Today, I read a NewsFactor interview with SugarCRM's Chris Harrick, in which he describes SugarCRM's attempts to merge the open source and SaaS worlds:

...[O]ne of the big areas we are working on is applying Open Source principles to the on-demand world. We released a product called Sugar Data Center Edition which allows partners to manage their own on-demand instances using Systems Management technology we developed to manage our on-demand grid. It breaks the black box approach of on-demand vendors and places more control in the hands of the people who are closer to the customers.

I find that indescribably cool. The big problem with SaaS is lock-in (though, as Tim O'Reilly notes, that lock-in pays outsized returns), and SugarCRM is now giving its customers a way to have the benefit of SaaS (simplicity and cost), adding a primary benefit of open source (customization), and reducing the lock-in. This is an act worth following.

However, as Harrick notes, many proprietary companies may not be interested:

[NewsFactor: If open source does come to dominate proprietary as the most common form of software in coming years, what will it have done that proprietary will have failed to do?

[Harrick]: They will have failed to listen to their users, because their development and distribution models are about under investing in engineering and over spending sales and marketing. This is the dirty secret of most public software companies, especially SaaS vendors. For every dollar of engineering they spend twelve bucks on sales and marketing convincing customers how innovative they are. But customers see it. They do not like being locked into vendors who do not innovate and they are looking for alternatives.

Game. Set. And Match.

Granted, SugarCRM and other SaaS-friendly open-source companies still have a long way to go, but it's gratifying to see SugarCRM breaking down the walls around SaaS that simultaneously make it interesting and frustrating to customers.

Disclosure: I am an advisor to SugarCRM.

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