Is SugarCRM An Early Warning Sign of Sage Channel Challenge?

SugarCRM is an open sourced open-source, web-based CRM solution, which is advertised as being able to run in the Cloud or on-site.

Recently I’m noticing more top tier Sage VARS advertising SugarCRM – most recently Blytheco (Sage’s North America Partner Of The Year) , then Faye Business Solutions Group and Brainsell.

Faye and Brainsell are listed on SugarCRM’s partner site. Blytheco is not so it’s possible they’re just running a series of educational sessions though it’s difficult to believe they’re adverting a competitor for what’s supposed to be one of Sage’s bread and butter markets (CRM).

These are not lifestyle mom and poppers – but some of Sage’s up and coming VARS. In Blytheco’s case they’re “top of the food chain” and in early January hired a former Sage CRM Exec as VP Sales.

Either Blytheco’s new VP of Sales designed this as a “middle finger” salute to former employer Sage , or , as “smart money” (a former Sage insider with deep product knowledge) he knows something the rest of the channel may not.

Of course it’s also very possible that adding a third open sourced CRM package is just smart business and none of the above theories are valid.

Does this new fondness for an outside CRM solution imply Sage’s channel is destructing?

Probably not. But once you open the door a little to a competing product line – it can be difficult to shut.

And to be sure Sage’s recent changes to certifications, support and business care have provided lots of incentive for formerly loyal Sage VARS of all shapes and sizes to sit up and start making backup plans.

So why are top flight Sage VARS seeming to  take flight to third party CRM packages when Sage offers 3 of their own (Act!, SageCRM and SalesLogix)?

 

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Comments

  1. For those of you reading thinking – meh, who cares.

    Two words — connected services.

    Let me explain (and I could be all wrong in my analysis – so take this alongside your own decision making skills and form your own opinions/thoughts)

    Connected services have been hailed as the light at the end of the revenue growth tunnel for Sage NA revenue streams.

    Think about what’s happening here.

    In essence SugarCRM is a connected service. You can make all sorts of technical arguments about what is and what isn’t a connected service. For my purposes I will keep it simple and say a connected service is anything that generates revenue to someone that’s not the core ERP product.

    It’s a non-Sage product that connects by external link and generates recurring revenue.

    The difference?

    Sage presumably doesn’t earn a penny when an “official” connected service is connected to their ERP.

    Hey BFD you’re thinking…

    Ok – fast forward a year when more connected services start to roll out — when Sage Exchange pushes out (which I presume is a giant money maker for Sage).

    What happens if more Sage VARS “break rank” and sell third party connected services where Sage doesn’t get a cut?

    This is potentially a huge issue.

  2. The truth is most of the partners you mentioned have been working with Sugar CRM for years now. They can all speak for themselves but, in my opinion, Blytheco and Brainsell are both solid Sage resellers and focused on Sage for most of their efforts.

    This doesn’t counter your point – it’s a slippery slope for sure.

    Two reasons that Sugar CRM is so attractive: it has the magical buzz word “open source” that a big segment of the market gravitates towards and it has subscription pricing with a steady stream of revenue for the vendor and the channel partner each year.

    Plus the folks that do Sugar CRM get $$$$$ in consulting because the “open source” nature allows for a lot of heavy lifting and the rather thin feature set requires it.

    Just my 2 cents. I would love to see a Sugar CRM reseller comment on why they are a Sugar partner.

  3. Hi Peter –

    There are many reasons to be a Sugar partner. I won’t go into every one of them, but I can certainly write about the highlights. First off, and most importantly to us, we find it to be a great product. We are always looking for great products to offer our client base, and Sugar fits the bill. In our experience with our clients, we haven’t found the feature set to be thin at all. Next, we find it to be easily and powerfully customizable. As master developers for MAS90 for years, we believe in the power of customizability. Sugar’s flexibility in this area has provided us with great opportunities to meet all kinds of unique requirements of our clients. We were able to build integrations with Constant Contact, MAS90, Authorize.Net, and others in a fraction of the time that it’s taken us to build integrations with other software. We also love the idea that it can be hosted at Sugar, hosted somewhere else, or hosted internally. Each of these options has pros or cons for our clients, and its nice to be able to have choices. And, lastly, our experience to date with management at Sugar has been nothing but refreshing, energizing, and positive. None of this is a slap at any other software or any other software companies. We just like Sugar a lot. I’d be happy to share our experiences with you in more detail any time.

    David