Historically, one of the biggest knocks on open source software has been its lack of presence in the enterprise software space. We generally define “enterprise software” as software that solves some sort of problem faced by the enterprise (the business). A rapidly evolving product known as SugarCRM is single-handedly shattering that stigma, and putting some serious enterprise-grade CRM (customer relationship management) capabilities into the hands of the everyman, or everycompany, as the case may be.

SugarCRM was founded in 2004 by CEO John Roberts, GM Clint Oram, and CTO Jacob Taylor. Since their founding, they’ve grown to a respectable 55 employees. In 2004, the same year of their founding, the company scooped up Communications Solutions 2004 Product of the Year Award. Not shabby.

The core product (SugarCRM Open Source) is freely available, so if you are running a business, you are able to download and implement the system without any software license costs whatsoever. This core offering serves up a lot in the way of functionality, including integrated contact managment, marketing campaigns, opportunity management, project management, lead tracking, account relationship management, web portals, integrated shared calendar, and RSS syndication. A nice “dashboard” metaphor brings all of the elements (and others) together nicely.

SugarCRM is also offered in 2 different commercial editions. The SugarCRM Professional edition adds additional features such as team management, MS Outlook integration, wireless access, sales forecasting, catalog management, and quoting. Among other things, the more robust SugarCRM Enterprise edition adds support for Oracle 9i and 10g on the database side, as well as some access to professional services and dedicated support services. If you want an easier path to going live, they also offer hosted solutions on a per-user basis.

SugarCRM (the company) gets open source. They realize that in order to be successful as an open source company, you basically have a very limited playbook. You offer a freely available core product, that is distributed via the open source license, and you grow your revenue streams around licensing for more advanced versions of the product, as well as professional services. If I’ve said it once, I’ll say it again: open source businesses are essentially services companies. (See: Software, Services, and Revenue, Oh My!).

From an architecture standpoint, SugarCRM is built around the wildly popular LAMP stack (Linux, Apache, MySQL, and PHP). The LAMP stack represents a fast growing open source enterprise software stack that more and more companies are using as an alternative to expensive proprietary software stacks (because of its lower cost and freedom from lock-in). While it is nice that the Enterprise edition will function with an Oracle database, it certainly isn’t required to achieve very respectable performance results. MySQL has come a long way from its early days – far enough, in fact, that Oracle acquired Innobase, a key technology provider to MySQL AB, the Swedish firm that produces and distributed the MySQL database engine.

While all of this sounds great, what really sets apart SugarCRM, in the opinion of this veteran technologist, is the fact that the leadership team has completely immersed aspects of online community building within their portal site located at SugarForge. Through the service at SugarForge, users are free to download and share themes (look and feel modifications), language packs, custom plugins, and other information. Also supported are support forums, a project lead database (mined by custom CRM implementors and service providers), and even a live chat (there were 8 or 9 folks in there a second ago chatting about customizing various aspects of the SugarCRM product).

From a cost perspective, there is simply no contest when you start laying out the numbers. According to Corra Technology, an open source software integration services firm, SugarCRM is over 6.5 times less expensive from a total cost of ownership (TCO) standpoint, when compared to rival salesforce.com:

Should Oracle, Seibel, et al, be scared? Not yet. The open source CRM movement is still creeping up from smaller companies to mid-size firms. Eventually, though, it is entirely conceivable that SugarCRM could exert some upward pressure on the aforementioned bellwether players, in much the same manner that MySQL put upward pressure on rival database maker Oracle within the enterprise database market.

Should salesforce.com be scared? You’d better believe it.

The future looks bright for SugarCRM, especially given their unique positioning at the nexus of the CRM wave and the open source movement, as well as their marquis capitalization via Draper Fisher Jurvetson, Walden International, and New Enterprise Associates (NEA). These are storied, lynchpin investment firms, and they made the decision to jump into the enterprise open source market for a reason.

Cheers.