OpenJason

SugarCRM Revenue Model

Matt McAlister has a really interesting piece examining an Open Source CRM (SugarCRM) versus Salesforce.com. He observes a trend through the lens of SugarCRM that is happening more and more – companies focused around Open Source software that drive revenue from services alone:

They’ve done a really clever thing which is to build a revenue model around the added services rather than try to charge for the core software. You can download the same app that everyone else uses and install it yourself for free. But if you’re not up to the installation challenge, you can let them host it for you and get started in about 5 minutes for a $40/month usage fee. They charge more for additional services that larger groups may require….

However I just can’t help but I wonder if SugarCRM is in a position to do to Salesforce.com what Salesforce.com once did to Siebel, undercutting on price and extending efficiencies further out to the edge. The edge used to be self-serve style software as a service. SugarCRM went further and took the edge all the way out to the open source community.

In related news, Peter O’Kelly points to Socialtext’s release of the first commercial Open Source Wiki:

Based on the same great product, Socialtext Open is released under a standard open source license, and contains all of Socialtext’s enterprise grade code aside from enterprise management and enterprise integration tools….

For organizations that require technical support, consulting and developer services for Socialtext Open, Technical Professional Services are available under a service contract for a flat rate of $240 per hour.

Socialtext Technical Professional Services complement Socialtext Professional Service options such as training, adoption consulting and management consulting available at variable rates.

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