Open Source CRM Opportunity May Be in the Cloud
Enterprises may be slow to adopt open source CRM, but the real market for the software may be in SaaS and cloud computing deployments.
Open source CRM software projects are growing in number, but analysts question whether they'll meet with widespread acceptance by enterprises.
Rachel Flewelling of Info-Tech Research Group said flatly, "Our clients just aren't interested in open source CRM, so we don't do any research on it."
Dale Vile, an analyst at Freeform Dynamics, strikes a similar note.
"While the enthusiasm for open source in the systems software arena is generally strong and growing, acceptance is much further behind when it comes to core business applications," he said. "The overall trend in business apps is away from customization, particularly anything that involves code cutting, so the potential benefits of open source in terms of freedom to modify/derive are not really relevant."
Vile added that any perceived cost savings on software, even if they do stand up to scrutiny, tend to be relatively insignificant when considered in the context of overall project costs like hardware, implementation and integration services and internal costs.
"For these reasons, the case for open source CRM implemented on premise is unclear, and I do not see some huge shift in this direction in the mainstream," said Vile.
He sees potential for open source CRM as the enabling technology behind software as a service (SaaS) offerings. Already, there are some big guns playing in the cloud CRM market, such as Salesforce.com, Microsoft Dynamics and Oracle. But they can be expensive for smaller and mid-sized organizations.
"Open source-based alternatives providing a more cost-effective solution as a fully supported service could be seen as relevant by many," said Vile.
Accordingly, a host of open source players have arrived on the scene, including SugarCRM, openCRX, vtiger CRM, Daffodil CRM, JunariCRM, hipergate, CiviCRM, Opentaps and CentricCRM.
SugarCRM Gets Noticed
The one that is garnering the most attention is SugarCRM, which claims 7,000 customers and more than 600,000 end users.
Forrester Research saw fit to include the company in its most recent Forrester Wave for midmarket customer relationship management (CRM). According to Forrester analyst William Band, SugarCRM has traditionally been targeted at the mid-sized and small organization market, but it continues to improve and is finding a home in smaller divisions of large enterprises. Band said that while the SugarCRM code is available for free, the Professional and Enterprise editions are fee-based. The company also recently unveiled an OEM version.
"Sugar Enterprise offers a sound low-cost choice for organizations that want deep customization flexibility in a packaged CRM application," said Band. "The open source model allows organizations to take a basic CRM platform application and build upon it using their own IT resources or add-on modules available through SugarCRM's partner and developer communities."
He lists SugarCRM's strengths as being offered as SaaS or on premise, lower cost and usability. On the downside, he worries about limited support for analytics, customer data management and field service. That said, the company was classified as a leader in the field by Forrester.