Market Leaders: Open-Source CRM

The Market

Open-source technology hasn’t yet landed a starring role in the overall CRM and enterprise resource planning (ERP) industries, says Mitchell Lieberman, president and chief executive officer of Comity Technology Advisors, and a former executive at open-source CRM pioneer SugarCRM. “Traditionally, open-source companies have made money via support,” Lieberman says. “In the past few years, this has changed to a ‘freemium’ model, plus the addition of a hosted model. In a hosting scenario, the fact that a company is using open-source [technology] has uniquely one benefit: It can take the application and host it itself.” That may be what’s in store, but at the moment there’s still a lot of jostling for second place behind SugarCRM. 

The Leaders

While the June announcement wasn’t enough for a bump to the top of the leaderboard, Compiere earned perhaps open-source CRM’s biggest headline of the year when it was acquired by ERP and CRM leader Consona. In fact, the move halted an otherwise diastrous slide: Compiere’s scores for depth of functionality and customer satisfaction both dipped to 2.3 this year, alongside a declining score of 2.0 for company direction (a figure that doesn’t reflect the Consona deal). Michael Fauscette, group vice president of software business solutions for IDC, can only describe Compiere’s system as “good enough,” and China Martens, senior analyst at The 451 Group, says some of the upstart’s downswing may trace back to a shift in focus away from ERP. “It might have something to do with people who have moved to CRM [and have gotten] too comfortable,” she mused. “Maybe it’s a given that users have already gone with Salesforce[.com].”

Concursive also saw a dip in customer satisfaction this year, along with a 2.3 in company direction and a 3.2 for depth of functionality. “Concursive kind of changed everything,” Martens says. “[It] rebranded and really focus[ed] on collaboration.” Recalling the company’s roots, Martens says Concursive’s strength in communities remains a factor, but “CRM is a legacy for [Concursive]. You just don’t hear about [the firm in CRM] anymore.”

SplendidCRM, another of 2009’s leaders returning this year, gets praise from Fauscette for having “pretty good functionality”—as reflected in a splendid 4.2 rating there. An absence of what Fauscette refers to as a “wow factor,” however, lands the vendor a 3.1 for company direction. “I don’t think they’re being very innovative in the field,” Fauscette says. “I don’t think they’re going to move heavily into social CRM. They don’t seem to be thought leaders. They’re OK, but they don’t wow me.” 

With a 3.2 in customer satisfaction, a 3.7 in company direction, and a strong 4.2 in depth of functionality, vTiger is easily the contender roaring loudest behind SugarCRM. Fauscette says he considers the firm “up and coming”—but that he’s not yet “over the top” for it. “They have a good system and I like the way they’re taking it,” he says. “They seem to have a pretty strong leadership team. I don’t think they’ve gone quite far enough into some new places.” Martens concurs, attributing vTiger’s strength to its aim at midsize businesses. Martens compares the company to the Concursive of the past, as a frequently used alternative to SugarCRM: “‘If you’re not using SugarCRM,’” she asks rhetorically, “‘what are you using?’” 

The Winner

SugarCRM landed this category’s top scores for the third year in a row, but with more enthusiasm for the company’s direction this time around. Sugar pioneered the open-source movement in CRM, but has seen criticism in the past for not prioritizing CRM itself. Fauscette says that he believes “Sugar has really gotten that message—they’ve achieved a good balance.” Last year, we noted that “the analyst community is a bit cloudy on where the company is headed”; this year, Fauscette is among those who raised his scores for the company. “I’m actually more impressed with Sugar than I have been in the past,” he says. “Under their new management team, they really improved their attitude about where they’re going to go with this. In the past, [they’ve been] really into being open-source, but [they’re] now very focused on being CRM…. They’re doing a lot of innovative things particularly in social CRM [and have] really engaged, exciting customers. [They’re] attached to the right sort of thought leaders.” Martens also attributed SugarCRM’s success to partnering up with the right kinds of companies: “SugarCRM remains pre-eminent in open-source CRM thanks to the strong [independent sales vendor] partnerships it’s built out and continues to push ahead with, teaming up with complementary peers both within the open-source community and elsewhere.” 

One to Watch

Although xTuple made 2009’s leaderboard, the company’s scores dipped slightly this year with a 2.7 in company direction, as well as in customer satisfaction. “Those needing an ERP system…are more likely to start with xTuple,” says Comity Technology’s Lieberman. The upstart’s still considered a strong competitor in the industry, though, as evidenced by a very strong 3.7 score for depth of functionality—outpacing a couple of the leaders. 

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