Special Feature
Part of a ZDNet Special Feature: The Art of the Hybrid Cloud

Hybrid cloud gives both privacy and performance: SugarCRM

SugarCRM has experienced year-on-year growth in the Asia-Pacific region as more of its customers prioritise the usage of technology as part of their CRM strategy.

For the first time, enterprises have drawn their attention to deploying technology strategies in the front office, and one aspect that they are focusing on is customer relationship management (CRM), according Clint Oram, co-founder and CTO of SugarCRM.

Oram has attributed the rise of mobility, cloud, and the subscription economy as the key drivers of why enterprises globally have drawn their attention to CRM. In particular, he highlighted that cloud has driven the cost down for businesses to deploy technology in the front office, and has helped streamline data processing — a key facet of CRM.

Oram said that when it comes to cloud technology, businesses are opting to process their customer data — in order to improve their customer service for end users — through a hybrid cloud strategy approach, rather than a pure public or private cloud environment, mainly for reasons surrounding local data privacy regulations.

"Data management is frankly difficult, especially when you're dealing with local data privacy regulations and dealing with massive volumes of data. This is why a pure cloud strategy doesn't work for many of our customers, and they have to focus on a hybrid cloud strategy," he said.

Wayne Goss, SugarCRM Asia-Pacific regional sales director, agreed, saying that the hybrid cloud approach is often something he sees customers in the Asia-Pacific region adopt mainly for reasons of both data sovereignty and performance.

In fact, Goss said that between SugarCRM's Australian and New Zealand clients, a third of them deploy their SugarCRM in a locally hosted environment; another third deploy it on-site; and the last third are using it on demand.

"You can take China, for example, where there's a great firewall in China, which means it's very difficult to provide a cloud-delivered service outside of the country, and there are other reasons like legacy issues. So the right approach is to have a locally hosted approach to the market, and we're finding a lot more people realise that," he said.

As a result of the increased uptake of CRM, SugarCRM has managed to build its platform so that it's flexible to move across different cloud models, which Goss said is the company's "major value proposition and differentiator" to other CRM software providers, which has contributed to the company's growth in the last decade .

Historically, the company targeted small to medium enterprises, and is now assisting multibillion-dollar enterprises, including the likes of IBM, HTC, Panasonic, Samsung, and, more locally in Australia, a Victorian government agency and OneSteel.

In the Asia-Pacific region alone, the company has seen 37 percent year-on-year growth. It has 1,000 customers and a total of 29,000 users in region, with the bulk — 60 percent — of them from Australia and New Zealand.

"Where we are in the marketplace today versus where we were five years ago — as we got started, we spent a lot of time working with small companies, helping small companies embark on their first CRM technology journey. Where we are today is we're working with some of the largest brands in the world," Oram said.

Goss added that the entry of new disruptive players — which are generally more tech savvy and have a better understanding of the importance of analytics when it comes to customer relationships — have also forced more traditional companies to prioritise their CRM strategy.

"They are thinking about how can we retain our customers and how do we use the information we have on them to grow our revenue, and the way to do that is to have a much more personal relationship with your customers," he said.

"So we're seeing the function of customer service and sales almost switch. Customer service was typically a support function, and sales was the one that went out to get the revenue, but now customer service agents are seen as the new sales agents. They're the ones who have the most interaction with customers, and they have to be able to understand their customer so they can upsell to them and predict their next action," he said.