We covered John Roberts’ Entrepreneur Journeys story in December of 2008. In this story, we explore the cloud CRM industry’s evolution with Larry Augustin, who replaced John as CEO on May 6, 2009.
Sramana Mitra: As you know, we have covered SugarCRM quite a bit before. So our audience does start off with some knowledge of the company. I’d like to start us out by asking you, now that we are in a mature phase of the cloud computing industry – and CRM on the cloud especially is in a very mature stage – what does your ecosystem look like? Who goes for what solution and why? Who chooses SugarCRM and why?
Larry Augustin: That’s a great question. It’s a great way to start out and explain how we’re different in the industry. I do want to come back to the notion of maturity in cloud computing and maturity in the CRM industry in general. Let me move forward with the differentiation first.
The CRM industry has been around for a while and has evolved. The products that have historically been developed there have really been about helping the company manage their sales team. They specifically answer questions for the company like, “What did my sales team do today? How many phone calls did my sales rep make? How many visits did they go on to the customer? Who did they visit? What does their pipeline look like? What is their forecast?” Those are all good questions for a company to ask about their sales model and sales team, but they don’t fundamentally solve the problem of helping the sales person sell.
The questions in Customer Relationship Management are not really about how you’re managing or developing a relationship with a customer. They’re more about how you’re running your own business. As I said, these are good questions to ask and answer. They also beg the most fundamental question when it comes to the customer portion of that and the relationship portion of that, which is where is the helper for the sales person in terms of managing a relationship.
Competitively, when we’re out there in the market, we focus on helping the sales person or anyone in a customer-facing role have a conversation and understand what’s happening with the customer. That’s the fundamental difference. When we go into an opportunity with a business, we start with, “How are we going to help your sales team interact with the customer better? How are we going to help the sales person who’s about to walk into a customer understand that business?”
We’re going to help the business build a relationship with their customers and manage the experience they’re delivering to the customer as a whole. When we see a customer who’s looking to build a great customer experience, understand the customer lifecycle across their business, help enable their sales team and support individuals to do their job better and better understand their customer, those are the places where we’re going to win and where we’re going to shine relative to our competition. That’s a fundamental philosophy difference.
In that sense, we see the CRM market as a very early one. If you look at the CRM market as a whole, there are roughly 25 million users of CRM products today compared with nearly 500 million people in customer-facing roles. That’s a big gap – 25 million users of commercial CRM systems and nearly 500 million in customer-facing roles. I see that as an opportunity and in fact, a very immature industry and one which is ripe for innovation. The innovation question is how you go from 25 million users to serving the needs of those 500 million people. In that sense, I see it as an innovative industry. It’s an industry that is ripe for innovation and is immature.