Goldman Investment Sweetens SugarCRM Cloud App Recipe

CIOs and the New Service Provider: What You Need to Know

As a provider of open source customer relationship management (CRM) software, SugarCRM has been fighting for a piece of a rapidly expanding market against well-heeled competitors such as Salesforce.com, Microsoft, Oracle and SAP.

Now backed by a new $40 million investment led by Goldman Sachs, SugarCRM plans to up its game considerably as the battle for dominating the coming second-generation of applications in the cloud gets under way.

The first generation of cloud applications was dominated by software-as-a-service (SaaS) applications that were hosted in data centers managed by the provider of the application. As cloud computing matures, it’s becoming clear that cloud applications can be hosted in any data center a customer chooses.

Whether that data center is owned by a customer or a third party doesn’t really matter. According to SugarCRM CTO Clint Oram, what we will soon see emerging are ecosystems of applications around business processes that share a common set of cloud infrastructure. CRM, which is often nothing more than the front end of an extended set of business processes, will be a critical application within those ecosystems.

Most of those ecosystems will be developed by SugarCRM partners. But no matter the ecosystem, a need remains for an application to manage customer interactions for any process.

SaaS applications in their current incarnation really represent the end of the first phase of what promises to be an extended war over best-of-breed cloud applications that Oram says customers will access via the cloud. Whether SugarCRM comes out on top of the battle remains to be seen. But the one thing that is for certain is that with the backing from Goldman Sachs, SugarCRM plans to be a contender.