Larry Augustin's practical revolution at SugarCRM

Larry Augustin's practical revolution at SugarCRM

Summary: Pretty soon we'll forget all about SugarCRM's badgeware past and start rooting for it. This is smart, basic, strategic thinking. It's how real executives earn the big money.


Because of his experiences at the dawn of open source, Larry Augustin has always viewed himself as a practical, hard-headed businessman.

The failure of VA Linux to launch obscured our view of that image but at SugarCRM he is making certain we know it's front and center.

Sugar's sniping at is basic target marketing. Aim at what you want to be, make yourself David to their Goliath, but let that be the start of your strategy, not an end in itself. It's like George Carlin's 7 dirty words -- it gets you attention but you need an act to back it up.

Augustin's act is to emulate Salesforce's delivery, only with powerful allies. Like Microsoft. A founder of open source committing resources to a Microsoft release, the Azure cloud? As Sarah Palin would say, you betcha.

Playing with Microsoft makes SugarCRM a player head-to-head with Salesforce. It substantiates the marketing. It puts some there, there. It scales SugarCRM up, makes it a player. The fact that it helps Microsoft is incidental. If an ally helps you, you help an ally.

Then there's a third leg to the triad, his deal with Tata to bring CRM as SaaS to India. India is a big market. Tata has major resources. India is a competitive market. You get better by playing in such markets. Your software gets better by having allies like Tata helping it move forward.

There is what Will Ferrell's George W. Bush would call "strategery" in all this. The alliances help him match deeds to words. The SugarCRM slogan on its home page, "the cloud is open," describes this pretty well.

Pretty soon we'll forget all about SugarCRM's badgeware past and start rooting for it, as the scrappy underdog next to Salesforce, never mind its alliances with Microsoft and Tata. This is smart, basic, strategic thinking. It's how real executives earn the big money.

Of course, having just a vision's no solution, everything depends on execution. Larry Augustin is less interested in being part of open source's past than its future.

Topics: Microsoft, Enterprise Software, Open Source

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  • Dana, what is the trend in the Open Source community?

    OS started as a software development and delivery model "for the people by the people", i.e. free use enabled by free contributions.

    Now free contributions are likely drying out. Companies with paid employees are contributing the most significant part of code. The OS mutates to a delivery platform, i.e. free use. The development isn't that free any more.

    Soon significant portions of OS functionality can't be used for free. (We can see it in SugarCRM today.) And with the advancement of cloud computing there will be legal excuse to abandon OS ideology completely. Since companies need to maintain computing infrastructure, they will charge for software use. Over time nobody will be able to separate nominal infrastructure charges and charges for the software. Welcome back business as usual! Welcome back slow paced IT life.

    Are there other trends? Are there any basics for hope, that any substantial OS will not end this way?
    incidental reader
    • I try not to be so negative

      Open source needs a business model. Clouds and products, as well as support and services, all go into making that business model.

      The fact that paid employees are now making the bulk of contributions to open source doesn't mean we're not still getting improvements, that the quality fo the software is in decline, or that it's becoming proprietary. What's most important is that the code is visible.

      I don't see any chance that we're going backward, although I acknowledge some reality in everything you say. I think our argument is whether the glass is half-empty or half-full, and I'm full of Thanksgiving spirit today.

      Have a good one.
    • is this really a problem?

      The increasing amount of code coming from paid programmers is not such a bad thing. In my 10 years of using linux and open source I have seen many projects come and go and fall by the wayside...
      Projects with paid programmers tend to have more development and are less likely to disappear.
      A truly high quality project generally needs at least one person dedicated to it full time. To dedicate this time the programmers still need to get paid. One interesting one, is Ardour (an audio DAW) which has had some corporate sponsorship in the past but this fell away at the start of this year. It needed a new business model to be able to continue development. Ceasing of development would have left many hobbyists and professional recording engineers a like without an application and to require to go back to propietary DAW's. The donation model to download was setup and works quite well.. The lead developer has not had to go back into the workforce. There are a few dedicated contributors to Ardour but without the lead dev it would slow to a grinding halt..(development that is)

      Of course there are projects like Mythtv which has an awesome amount of development going on, but as a package it has a much broader base of appeal (how many people don't watch television).. and therefore can bring in more unpaid developers.
      • I agree

        I don't think having paid programmers contributing code is a problem. Many of our best projects are essentially shared corporate computing projects (like Eclipse) where members build proprietary products from the common store.
  • RE: Larry Augustin's practical revolution at SugarCRM

    I see no problem with corporate funding for programming
    on OS project; provided the community engages openly and
    contributor status is an earned position as established
    by the community. Although there are a number of OS
    healthcare projects that are primarily developed through
    corporate funding, my preference is to see a community
    that is more heterogeneous -- corporate funding and
    volunteers -- as I believe this leads to better code (my
    • There is a problem, though.

      Thank you all, who responded. If we're looking in the rear view mirror we see and can prove the shift from unpaid code contributions to paid ones. By doing this we take consumer's position. And nothing has changed for consumers. The free and open code is still free and open. So why should we be worried about the change?

      To gain real insight, to guess why things happen realistically, and to predict what to await in the future, we need to look additionally into the minds delivering the code and need to understand their incentives. I replied to Dana, he seems to understand importance of this move as he covers Oracle's efforts to get onto MySQL as well as other industry movements. I hope you will share this perspective too.

      I think there are two groups who are acting on the code supply side: coders and wall street. The later group's role is wonderfully described in Dana's article "Open source is not about Wall Street" 2009-11-30. Basically, both groups are there for money or what you could buy for it. The difference is that Wall Street can live with volatility on the demand side (code consume) and the coders can't. Coder's have natural need to be constantly employed and feed the families. Wall Street can easily redeploy money where the most profit is. It can be anything: commodities, bio tech, or the software code.

      If the Wall Street doesn't invest in IT businesses or related to it, the vast amount of coders is underemployed. In a perfectly tied economic situation this would mean that excess capacities of coding power had had to be retrained and redeployed following the money redeployment.

      Recently we had several decades of consumer's welfare. Huge financial resources have been available to consumers through various credit programs. (By the way, this very fact also decided the fate of personal computers. The available to disposal resources created a potential to sell it) It created an interesting phenomenon: people could hold on their professions. Additional resources on hand allowed to sit out tides. Particularly, programmers would rather produce free software than learn other professions. Summarizing, the readily available consumer credit enables free contributions to open source.

      During the recent couple years the real costs of disposable money from credits are grown significantly. And the crisis made the model finally obsolete. Guess where do free contributions to OS go? And if community does not engage, there is no competition to paid software. There is no cheap alternative to software with thick profits for the middle man from Wall Street.

      May be corporate OS funding now is just a tactical move to secure positions for the return to the business as usual in the future? I repeat my initial question, are there other sustainable scenarios?
      incidental reader
  • SplendidCRM also on Azure

    SplendidCRM is also available for Azure. But as a native C# .NET application, you might be able to leverage SplendidCRM to get a free Azure account when you signup for Microsoft BizSpark.