The 2009 Market Leaders - Open-Source CRM

THE MARKET
In an economic environment that is forcing companies globally to rethink their CRM technology investments, open-source CRM may have found its niche. Its innate ability to be built around programming code open to the public as opposed to vendors' proprietary code continues to be a feather in this segment's cap, according to China Martens, senior analyst at The 451 Group. "Many vendors have limitations in customization," she says. "Open-source vendors have been doing this and positioning themselves nicely by not having such limitations. Everyone is seeing spikes in their download numbers." While SugarCRM won for the second straight year, SplendidCRM makes its debut on the leaderboard, one that tightened up considerably with only a tenth of a point separating the top three leaders behind the Cupertino, Calif.-based pioneer.

THE LEADERS
Compiere was dinged last year for not having a software-as-a-service (SaaS) option, but promised to come out with one in 2009. The company delivered, and was rewarded with a company direction score (3.8) a half-point higher than last year's. "A SaaS version has helped," explains Ray Wang, a vice president at Forrester Research. "People were surprised it didn't have a SaaS offering, particularly on open source." Still, the company dropped six-tenths of a point to 2.7 for depth of functionality. "Its strengths are more on the sales aspect,"Wang adds, "[with] a bit of e-commerce."

Concursive remained solid,with its company direction score rising a quarter-point this year to a 4, and its depth of functionality score steady at 3.3-both of which are second only to winner SugarCRM.Analysts laud the company for the ability to create online communities from social networking sites or even business directories with ConcourseConnect. "It is being innovative in taking advantage of trends that Compiere is not," says Michael Fauscette, group vice president of software business solutions for IDC. Martens adds that while the collaboration features could become a tremendous differentiator, the company needs to relay that message to its current and prospective customers, as its customer satisfaction score was second-lowest among leaders. "It has to do some evangelizing around what it is actually doing," she says.

SplendidCRM, built on the Microsoft platform-Windows, ISS, SQL Server, C#, and ASP-narrowly missed our One to Watch spot last year, but this year burst onto the leaderboard, buoyed by its tied-for-second-place customer satisfaction score of 3.75."The company's got it right,"Wang says."SplendidCRM has taken the view that support is mostly going to be done in the field, and one of the areas it pushed out more-in terms of mobile support-is really important and hasn't gotten a lot of credit." Martens says that more attention has been paid to the company, particularly in the last year. "I'm not sure if the fact it's Microsoft-based makes them of interest, but coming out with a SaaS version late last year obviously helps."

According to the analyst community, xTuple continues to proceed steadily. Not apologizing for focusing more on enterprise resource planning (ERP) and viewing CRM as a subset of it, the straight-shooter message and its sales functionality is well-received by its customer base, which explains its half-point increase in customer satisfaction to 3.75 this year, tied for second-highest. "The company is more focused on ERP pieces still, and is trying to get deeper in ERP than CRM at the moment,"Wang says, which can explain its 2.3 score for depth of functionality. Check back here next year to see if the score improves with the advent of xChange, its online marketplace of add-ons and extensions for its current offerings.

THE WINNER
SugarCRM takes the top spot once again, leading the way in every category. "SugarCRM is so head-and-shoulders above everyone else it's kind of ridiculous," Martens admits. Nonetheless, with the ouster of founder John Roberts as chief executive officer earlier this year, the analyst community is a bit cloudy on where the company is headed next, reflected in a 0.6-point drop in its company direction score, to 4.1 this year. Fauscette postulates, though, that the move could end up benefiting Sugar. "The company needs some freshness about this fight," he says. "SugarCRM hasn't really broken out as strongly as it could, and part of it is due to the process of  open-source adoption, because it has been slow to move to the center. But I sometimes think it's good for founders to step out and get some fresh blood going-so I don't see it as a negative." -Christopher Musico

One to Watch - Open-Source CRM
vTiger, highly touted last year with scores second to SugarCRM, surprisingly fell to the One to Watch spot. Blame a tremendous drop in company direction (from 4.4 to 2.8). While IDC's Fauscette says customers are "fanatical about the product"-reflected in its 4.0 customer satisfaction score-vTiger needs to retool. "I don't think it is particularly visionary like catching the next generation-it's more traditional CRM," he adds. "vTiger has got some way to go from a vision standpoint."

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