CRM competition in the time of open source

CRM competition in the time of open source

Summary: CRM is mission-critical, even for small businesses. It's a major expense, and can be a major differentiator. If you can save money and gain more control over your system with open source, should you take the risk and take the plunge?

TOPICS: Open Source

Twice this week I have written about CRM and open source, asking some hard questions from the customer and developer perspective.

But that's not the only perspective.

From the "vendor" point of view, there is always opportunity. Take what we wrote about SugarCRM. They are putting a price tag on software they call "commercial open source."

But if you don't like their terms, conditions, or pricing, it turns out you can get the same stuff from iRadeon, for less. As a spokeswoman wrote me yesterday:

What iRadeon does is take SugarCRM's free pure open source product and packages it with security, management and support (basically making it the equivalent of Sugar's own enterprise-class product) and sells at a fraction of the cost of Sugar. iRadeon's CRM plans start as low as $75 per month for nine users. [Note on the correction: iRadeon's PR spokesperson said she mispoke regarding comparisons of iRadeon's forthcoming Sugar Open Source™ CRM version 3.5 distribution to SugarCRM's Enterprise product. iRadeon has tailored their services specifically to small- and medium-size business.] 

When you see proprietary software you have some control over pricing. When your source is open, someone else can take what you have and repackage it for less.

The question remains, however. Are all these offerings compatible? Can you switch among vendors for support? How much on-staff expertise does a small business need to manage this?

The bottom line seems to be there are opportunities here. CRM is mission-critical, even for small businesses. It's a major expense, and can be a major differentiator. If you can save money and gain more control over your system with open source, should you take the risk and take the plunge?

Maybe you should. But it's a bet-the-company decision.

Topic: Open Source

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  • Switching cost low for small business

    I see very little risk for a small business using open source CRM. CRM is a nice to have, not a must have and it?s generally not mission critical. Small companies will do little to no integration of a CRM program into their environment. They need to concern themselves more with product marketing, their target customers, and the strategic sales process, not sales and marketing mechanics which they get with CRM integration. That can come later.

    Therefore, compatibility is not much of a concern. The cost to switch from one CRM to another for a small business is quite small since there is generally no real process integration.

    Now, at the large enterprise level it's another story . . . .
  • iRadeon On-Demand Services

    Hi Dana, I want to commend you on your thoughtful discussion regarding 'Commercial Open Source'. As more commercial activity builds around open source projects like Sugar, a clearer distinction between free and open source software needs to be made in the media.

    I also wanted to clarify a point made in your blog post. iRadeon does not have a separate 'distribution' of Sugar Open Source. We are an on-demand service provider for Sugar Open Source and other open source projects like ATutor and NetOffice. We do not view SugarCRM as a competitor, indeed we have a formal partnership with them. Our on-demand services simplify the deployment, support, and management of these applications for businesses that don't have the in-house expertise to do so on their own.

    I've added your blog and look forward to more discussion on the future of open source.

    Best Regards,
    Jeff Minich
    VP, Strategy
  • Vendor Independence

    We also provide independent support and maintenance for not only the SugarCRM Open-Source, but also the Professional and Enterprise solutions, although most of our work is showing people how to make the most of the tools, and how to integrate with back end systems.

    This lack of vendor lock-in is one of the key benefits of open-source products. If you don't like the service you're getting from one vendor, simply switch to another, or do it in-house. These aren't options you have with many other alternatives.

    The challenge for SugarCRM Inc. is to provide a good enough service that customers are prepared to pay for it. In most cases they do, and even when someone wants to go it alone, it just spreads the message that SugarCRM is a great product.

    For a live demo of SugarCRM check out

    Marc Englaro
    Director, Business Development
    Insightul Solutions Pty. Ltd.