SugarCRM v. Salesforce – A Review of the SugarCRM Webinar

12/21/2010

By Srini Katta

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 SugarCRM v. Salesforce – A Review of the SugarCRM Webinar

Last week (12.15.10), I attended a webinar titled, 10 Reasons Why Salesforce Customers Switch to SugarCRM.  The webinar was conducted by Jan Sysmans, Director of Product Marketing at SugarCRM and Geoff Mobisson, Managing Director of Levementum (a SugarCRM focused solutions company).

 

As the title suggests, the webinar focused on the key differentiators between SugarCRM and Salesforce (SFDC).  In particular, they highlighted examples of customers such as Caplin and Loomis who switched from SFDC to SugarCRM.

 

For purposes of this blog, I will outline the content of the SugarCRM webinar then conclude with my own assessment of how accurate SugarCRM’s claims are.

 

The table below provides an overview of the webinar’s central arguments regarding the key differentiators between Salesforce and SugarCRM:

 

No.

Reason

Salesforce

SugarCRM

Value

10

Deploy Anywhere

Pure Software as a Service (SaaS) platform

Offers customers the ability to deploy the solution in Sugar Cloud, Public Cloud (Such as Amazon), Private Cloud, or On Premise.

 

Flexibility

9

Customizations & Integrations

Proprietary force.com language.  Only SOAP API supported

Common language PHP SOAP and REST API supported

Greater flexibility and more control

8

Openness

Closed environment

Open source with code level access

Highly customizable using MySQL, PHP and Apache

7

 More Value

5 levels of subscription and upgrade to next level to unlock more features and value

Sugar professional has more features than Level 1, 2 and 3 of SFDC

Integrated marketing engine; Flexible mobile solution


 

6

No Penalty for Success

Penalizes your CRM Success

No penalty for greater value; Sugar professional is equivalent of SFDC enterprise

Customer CRM success never equates to an upsell opportunity

5

Flexibility

Flexible terms; Integration is controlled by App Exchange

Integrations are open and available to all customers and partners 

No vendor lock- in

4

Your data is yours

CSV is not a usable format; No ODBC support; Additional cost for weekly backups

Fully relational database backup, ODBC support and weekly backups are free

Greater control

3

Configurations

Configurations by admin

Configurations by end users

Greater control

2

Intuitive

10 year old design; Focus on chatter not on sales; Unnecessarily complex

Common Web 2.0 UI; Better end-user adoption

Better end-user adoption

1

Affordable

Enterprise edition $125/user/month

SugarCRM  $30/user/month

Cost always  matters

 

The webcast ends with a strong statement from Oracle’s CEO, Larry Ellison.  He claims, “Salesforce has a weak security model - everyone's data co-mingles on the same platform and if that goes down, everyone goes down. It is not fault tolerant, it's not virtual, and it's not elastic.”

 

Overall, I was impressed with the SugarCRM webinar.  That being said, however, I thought it was necessary to do my due diligence and research some of the claims made throughout the call.

 

First off, I researched the security model of SFDC.  I found an interesting statement from OAuth co-creator Eran Hammer-Lahav.   Hammer-Lahav states that, “the OAuth 2.0 security model used by SFDC, Facebook and others are weak and easy to crack.”

 

You can find more information on SFDC security at the pdf link below:

http://www.salesforce.com/assets/pdf/datasheets/security.pdf

 

Revisiting SugarCRM’s list of 10 reasons, let’s conduct a quick reality check.  Below is my assessment of how accurate SugarCRM’s claims are: 

 

10

It is true that SugarCRM offers multiple deployment options compared to SFDC.

9 & 8

PHP is a free software whereas force.com is proprietary.

7, 6, & 1

This is a price play. According to Yahoo Finance, SFDC has an operating margin of 7.94% and profit margin of 4.76%.  One must wonder how lean SugarCRM operations are to be able to offer a price per user that is 30% less than SFDC’s price and still make a profit.   We should remember that prices are always time specific and SugarCRM’s price today may not be reflective of a long term pricing model.

5

SFDC requires a 24 month contract .

4

SugarCRM offers more backup options and free weekly backups.

3

There are pros & cons of admin based configurations vs. user based configurations.  There is no outright value to either option.

2

Both SFDC and SugarCRM support Web 2.0.

 

So SugarCRM definitely provides some unique offerings.  Obviously, the webinar was biased and did not outline any of the unique offerings that Salesforce has, but we can save that for a different blog.  One thing is certain, SugarCRM is trying to penetrate into the market where SFDC is an established player!

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