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Social CRM: The Facebook generation demands it

3rd November 2011

When Gartner listed the 10 technologies it expected to explode in the enterprise market in 2012, it failed to highlight Social Collaboration and Customer Relationship Management (CRM) tools. However, from Oracle to IBM, it seems social collaboration is all the rage, and one company in the prime position to benefit appears to be SugarCRM. We talked to their CTO, Clint Oram, about why getting social is becoming so important in business.

Interview with Clint Oram, CTO, SugarCRM
Chris Ward, Editor, BCN

In IT terms, SugarCRM have been around for a while now. Long enough to rack up over 5,500 customers in 80 countries, in any case.

“Business is good,” says Clint Oram, the company’s bright and breezy CTO and co-founder, when I speak to him prior to the IBM roadshow in London. Not bad for a man who has just flown in from California.

“2011 has really been a great year for Sugar. We’ve been in operation for 8 years, but right now some significant partnerships are falling into place for us - most notably IBM (SugarCRM will be a key application offered on the new IBM SmartCloud), who we’re now working with around the globe and talking to people about what it takes to be a social business, like we’re doing so here in London and then in Dublin.”

SugarCRM’s social applications are based on what now seems like a remarkably obvious formula. A collaboration package that brings richer relations between business and customer, or employee to employee, using cloud computing to allow file shares, Qontext to keep in touch with customers and some nifty email integration and analytics thrown in for good measure. With the internet so vital for pretty much all of the services industry and beyond, social collaboration almost seems like a no-brainer for the enterprise.

“Personally, I think this is probably the most exciting times in the history of CRM,” says Clint.

“There’s a very profound change happening in businesses around the globe right now – perhaps as much impact as the internet had in the 1990s, as companies and customers all adopt social collaboration tools to improve the relationships they’re forging in business.”

While Clint admits CRM is nothing new, “CRM as a software package has become fairly well-established in the last 15 years,” he says, it appears now is the time that companies are going to be able to establish a best-practice for actually using it. It’s something called 2nd generation SaaS.

“If you look at global trends in business, there are probably now 3 critical influences taking place. The first is probably cloud computing – we’re now making it extremely easy to deploy applications that enhance business technology and that is of course driving businesses into change.

“The second is of course mobile – we’re now talking to CIOs who are looking to completely remove the need for laptops in favour of smartphone and tablet use. Having all their applications directly on tablets.

“And then the final influence which brings everything together is social collaboration – now that we’re able to communicate with everyone on a day-to-day basis via these new devices, we need to work out how we all actually work together.

“It’s these collaboration tools that develop person-to-person communications. At the end of the day, what’s the purpose of a company? To create happy customers. What we’re trying to do is connect a person with a problem with a person with a solution, in the quickest way possible.”

As if there was any requirement for SugarCRM to justify the importance of what they’re trying to do, it seems Oracle just went and did it for them. There recent purchase of Sugar’s rival CRM vendor RightNow for a staggering $1.5bn was met with a general round of applause in the media.

“RightNow’s leading customer service cloud is a very important addition to Oracle’s Public Cloud,” said Oracle’s Vice-President Thomas Kurian, and he was right. The big thing for the biggest IT companies at the moment is developing the full cloud package, and CRM slots in nicely among the human resources, talent management and analytics tools now being pushed out to the enterprise as public cloud.

So is Clint worried about Oracle’s latest movement? Not exactly. For two reasons. Firstly, SugarCRM is Open Source. “One of our key differentiators is that SugarCRM software can be deployed on a variety of cloud platforms, from Amazon, to IBM SmartCloud or RedHat or even Oracle if they wanted. Giving our customers the choice of where they deploy the applications gives them the control they need over their data, which is critically important for most customers with all the issues related to government regulations etc. Customers need to know where their data resides.”

And then there’s Salesforce. We all know about Oracle’s distaste of their loud and vivacious cloud rivals. And Marc Benioff and co are often seen as SugarCRM’s biggest SaaS rival too, there’s just been no verbal ping-pong between the two companies. Clint seems to favour with Oracle though.

“I agree with Larry Ellison. Salesforce is 1st generation SaaS.”

"1st generation SaaS has been all about lock-in, about giving customers no choice in terms of where their software runs and where their data resides. These golden handcuffs have worked for a lot of people but they don’t work for every business developer.

“What we’re saying is we’re 2nd generation, and 100% open. 2nd Generation SaaS really takes advantage of cloud computing and is something that Larry Ellison championed recently and something we're pushing.”

So are Sugar worried about how much of their business Oracle swallow up with the acquisition of RightNow?

“CRM is only really just taking off, in SaaS terms. There’s so much scope. What we’re seeing now is not just a matter of swapping out old CRM systems, it’s a matter of introducing people to completely new ones.

“As an example of CRM changing business - there are 3bn active email addresses in the world, of which a quarter are corporately-used addresses. So there are 750m around the world using email in a work environment.

“There are only 15m users of CRM tools such as ours at the moment. This is a massive window of opportunity for us, because we have a potential market of 750m.

“Based on these figures, you could say CRM is yet to become established , but I can guarantee it will take off massively in the next few years. In any business. We have a whole new generation of social collaboration users – who we call the Facebook generation - that expect these tools in front of them when they sit down at a new job.”

So, business looks set to be rosy for a while yet. Clint is a pretty busy guy, and is soon ushered into a room to help deliver the next part of the Social Business Roadshow, but leaves with a parting note about the company’s recent partnership with IBM.

“Being on SmartCloud opens up a whole new business line for us. If you look at the previous adoption of CRM, it’s almost always delivered for the mid-market, whereas the work we’re doing with IBM Smartcloud is taking SugarCRM’s success to the large and multi-international companies to show them the importance of social collaboration and CRM tools.”

It seems that if your business hasn’t gone social already, there’s a good chance it will do soon. Regardless of its size or requirements. And there’s also every chance SugarCRM could play some part in your business’s social development.

Tags: software as a service | enterprise 2.0