Forrester recently has a case study highlighting Sugar CRM. For the uninitiated Sugar CRM is a commercial open source CRM product business, with all of the source code to the public but maintain a commercial business by providing services and support.

The company was founded in April 2004 and has grown to support 900 paying customers and 50 languages. The firm boasts 150 resellers in 30 countries and 5,000 developers contributing translations, bug fixes, and extensions to the product.The company has grown to more than 90 employees and has clocked more than 2.2 million downloads of the software.

It was intereting how SugarCRM has changed thier business model "they quickly discovered that as developers, they wanted to develop a product that was easy to use and intuitive, and they reduced the need for services. They didn't want to build something that was agonizing to support and didn't feel that they could maintain uniqueness by only offering services. SugarCRM designed its product to be used by people throughout a company, including those with limited technical knowledge. Projects that require deep technical knowledge to run can survive on only services sales - products that are easily used by anyone, like SugarCRM, cannot. Therefore, SugarCRM switched to a model of selling advanced services to the larger customers while providing small businesses with a solid open source core product."

On what they did right:

- Became Experts on licensing agreements - SugarCRM currently uses a mozilla license, but the company also recently released a Windows version under a Microsoft open source license to reach a broader audience.

- To compete against the big vendors with flexible architecture - SugarExchange, it can see which features and functionalities are at the top in terms of user demand, and its commercial customers bring SugarCRM clear alerts to any problems.

Source: 1, 2

Prashanth Rai