Business Tech

John Roberts on Wednesday resigned from his post as CEO of open-source CRM vendor SugarCRM, leaving board member Larry Augustin to assume the role of interim CEO while the company conducts a formal search for his replacement.

John Roberts

(Credit: SugarCRM)

Roberts, whose grounds for leaving the company and future plans remain undisclosed, has made a huge impact on the open-source world, innovating the "Open Core" business model and helping drive open-source applications into the enterprise.

SugarCRM, despite losing Roberts, will be in good hands with Larry Augustin, who, as founder and former CEO of VA Linux, sits on a number of open-source company boards, including Pentaho, Compiere, Appcelerator, and Medsphere. He understands how to run an open-source business and, importantly, what to look for in leadership. Augustin should be able to find a strong CEO to lead SugarCRM.

Augustin's near-term task is clear, as he outlines in his blog announcing the change in leadership:

Yesterday, I stepped into the role of interim CEO at the company. I have an immense amount of respect for the founding CEO, John Roberts...My goals for the next 30 days at SugarCRM are fairly simple: get to know the team, customers, and partners. I am looking forward to helping them to continue to execute and (taking) the company to the next level.

In other words, continue the solid work that Roberts started.

I first met Roberts at an SDForum event in 2004, at which time I thought that he was crazy for believing open source could succeed in applications. He and his SugarCRM team persisted in their Quixotic dream, building SugarCRM into a thriving company that brought in tens of millions of dollars in sales last year and has an eye on an IPO.

I couldn't reach Roberts for comment but hope that he spends a little of his downtime on cycling, one of his passions, before he leaps back into the open-source world. As Augustin notes of Roberts, "Few people have taken a company from concept to major growth the way John did at Sugar."

I agree. Roberts will be missed. Fortunately, his legacy should live on at SugarCRM, one of the pioneers of commercial open source.

Disclosure: I am an adviser to SugarCRM.

Follow me on Twitter @mjasay.

Salesforce.com CEO Marc Benioff

(Credit: Stephen Shankland/CNET News)

Salesforce.com showed Wednesday that cloud computing can produce serious money--but also that it's not immune from the current unpleasant economic climate.

For its fiscal 2009, which ended January 31, the San Francisco-based company reported revenue of $1.08 billion, a 44 percent increase. But for fiscal 2010, it lowered its forecast to a range of $1.3 billion to $1.33 billion.

In November, the company had forecast $1.35 billion to $1.36 billion, and analysts surveyed by Thomson Reuters expect on average $1.325 billion for the year.

"We've slightly lowered the guidance range. There's increasing uncertainty out there," Chief Financial Officer Graham Smith said on the company's conference call.

For the company's fourth quarter, Salesforce.com reported net income of $13.8 million, or 11 cents per share, on revenue of $290 million. That compared with $7.4 million net income and $217 million revenue for the year-earlier quarter, and it was better than the 7 cents per share on $285 million in revenue analysts expected.

In after-hours trading, Salesforce.com's stock rose $1.50, or 5 percent, to $29.60.

Salesforce.com's core service lets customers track and analyze customers activity; its online approach also features alliances with some other high-profile Internet sites, including Amazon Web Services, Google Apps, and Facebook.

Salesforce.com's mascot advocates cloud computing over in-house software.

(Credit: Stephen Shankland/CNET News)

The company competes chiefly with Oracle's Siebel software for customer relationship management, which typically is run on massive computers a company runs on its own.

Salesforce.com has been branching out, though, offering its Force.com system to let companies build their own custom Web-based applications or third-party programmers offer their own extensions to those customers. And in December, the company launched Force.com Sites to house customer's Web sites.

In the fourth quarter, Salesforce.com's technology overall completed more than 12 billion transactions, the company said. The total of more than 1,500 Force.com Sites received more than 15 million page views in the quarter, and there are 166 applications available in the Force.com AppExchange.

"The numbers for the fourth quarter clearly demonstrate increasing adoption of the force.com platform," Chief Executive Marc Benioff said in the conference call.

Spring has come early at Salesforce.com.

The hosted enterprise-applications company on Tuesday unveiled Salesforce CRM Spring '09, offering up such customer relationship management features as content assembly, content delivery, content tracking, and "Opportunity Genius."

Opportunity Genius aims to connect a company's sales representatives who are working on similar deals.

Salesforce has also added three content features to its CRM Spring '09, one designed to let people create new sales and marketing materials by bringing together a variety of existing presentations from across a company.

CRM Spring '09 also adds a feature that enables sales representatives to send presentation packages as a collections of URL links, rather than a large attachment for download. Via the hyperlinks, companies can track actions taken with the links, such as who viewed the materials and the amount of time spent viewing the content.

This was originally posted at ZDNet's Between the Lines.

Despite the recession, 2009 is going to be a critical year for all of those key vendors that best describe their turf in acronyms--CRM, ERP, BPO, and perhaps a relatively new one: VRM.

Those acronyms, which stand for customer relationship management, enterprise resource planning, business process outsourcing, and vendor relationship management, respectively, are going to be more than just jargon in the year ahead. They are going to be critical to businesses, as they ponder upgrades, stand pat, or try to figure out how to revamp.

CRM: Get ready for feedback 3.0 and VRM.
It's a bit surprising how CRM has become such a hot area when it was all but written off for dead just a few years ago. In the end, CRM's resurrection isn't all that surprising. Your customers--mining them and keeping them--is more important than ever. Toss in social networking, and the need for companies to actually listen to customers and their feedback, and you can see how CRM may be your most valuable application.

The revelation that CRM was more than just some space being commoditized by Salesforce.com hit me at Oracle OpenWorld. Since I'm quite familiar with CRM, but far from an expert, I figured that it made more sense to get the guy that wrote the book on CRM, Paul Greenberg. In a series of posts, Greenberg has the rundown on CRM in 2009, including a tour of the key vendors, emerging themes, and forecasts for the year ahead. His work is a must-read for anyone interested in CRM.

Greenberg's focus has been on CRM 2.0, which, in a nutshell, is the coupling of traditional CRM applications with social-networking functionality. He expects the integration between these two sides of the customer equation to accelerate, even if there's a downturn.

Two themes stick out:

• Feedback 3.0: Today (in Feedback 2.0), companies are listening more to customers to learn, but little conversation is happening. Feedback 3.0 will mean that companies will engage with the customers doing the most yapping.
• Vendor relationship management: Simply put, a VRM tool would be something customers use to relate and manage multiple vendors. Greenberg thinks that 2009 will be the year in which VRM becomes more than just a concept. What's ironic is that vendors that have the most tentacles into companies (Oracle, for instance) may become players. Just imagine the following: here's a VRM tool from a big vendor so you can better manage it.

ERP: Here comes the dogfight
One of the hardest sells in 2009 will be convincing customers to start new ERP projects. How do I know? SAP is already hitting the infomercial circuit, and 2009 hasn't even started.

What we do know is that big projects are going be tough to get moving in the current economy. There aren't any bigger projects than ERP implementations. You have consultants. Big systems. Customization. Process revamps. And probably a few more consultants, once you've screwed up the customization and process parts of the equation. Dennis Howlett has documented SAP's challenges, as well as the ERP sector.

As for Oracle, we'll know a lot more on Thursday how the company is doing. The good news: Oracle hasn't preannounced its earnings. The bad news: Oracle is likely to feel some pain as customers pull back. However, the company is very diversified and collects a ton of maintenance revenue. Simply put, it has the assets to weather the downturn. Look for an Oracle-SAP bloodbath in 2009, with interesting detours provided by Microsoft and NetSuite.

BPO and IT services: Where we heading?
At the beginning of the great recession of 2008, IT services companies--those that allow you to outsource your infrastructure and processes--were seen as being immune from collapsing IT budgets.

No more.

Citi analyst Ashwin Shirvaikar says in a research note:

Our interactions with industry participants indicate a sharp deterioration in near-term visibility for the IT service providers. Many buyers--especially in the financial-services vertical--seem to be considering IT budgets that are lower year over year by as much as 10 percent to 20 percent. This kind of a decrease is sharply lower than our CIO survey from September, which indicated that IT spend would be down sequentially, but still up 1 percent year over year.

To put this in perspective, we have had overall IT spending at flattish only once before-- in 2002--while all other years, the IT budget has grown. Clearly, the credit crisis and global economic slowdown--especially with sharply negative news flow that coincided with the budget season--is a contributing factor.

Brian Sommer sums up 2009 for IT services providers simply. These services giants--IBM, Hewlett-Packard's EDS, Accenture, and a bevy of Indian players--can either hunker down in the downturn or innovate their way to more business.

IT services giants will make that choice all through 2009. So where's the innovation going to come from? My money is on the Indian outsourcers--Wipro, Infosys, Tata, et al. Sure, these vendors have their troubles--the biggest worry is a heavy reliance on financial-services customers.

However, there's a lot of complexity to smooth out in that industry. Just imagine integrating the systems for the Merrill Lynch-Bank of America merger. Multiply that IT rat's nest by about 50, and you have the financial-services sector. Meanwhile, the financial-services industry is risk-averse. What if the Indian offshoring companies swoop in, assume the IT risks, and say they'll reduce a company's complexity every year. From there, Indian outsourcers have a platform they can take to retail and health care.

That theory is proposed by Ravi Aron of the University of Pennsylvania's Wharton School. According to a Knowledge@Wharton India article:

Although it may take a year or so until the financial-market turbulence dies down, (Aron) expects that offshore-outsourcing firms will move toward offering better business process outsourcing services. He notes that it doesn't make sense for offshore firms to "diversify just for diversification's sake," but he predicts that India's technology giants can find new business from financial-services customers, which are rapidly integrating mergers while shedding noncore businesses. With new offerings created for financial-services firms, offshore-outsourcing firms can target other struggling or inefficient industries, such as retail and health care.

"Financial-services firms are very interested in reducing complexity and minimizing risk," Aron says. "They want to standardize processes, and when finished, they will look at automation. Offshore-outsourcing firms have a great opportunity to offer platform-based business process outsourcing, where they provide the technology and automate what a company does. The future for offshore-outsourcing companies is to take 1,200 systems to 800 to 700, then 500 on down. There will be wrenching change in the back office."

Aron adds that Indian firms will have to hire a lot of United States-based expertise and project managers to make that vision happen. It sounds quite plausible, so watch that back half of 2009.

More for your enterprise applications reading list:

• Phil Wainewright: SaaS and the renewal question
• Joe McKendrick: Business leaders worry: who will mind the IT store?
• Dana Gardner: Linthicum podcast: Cloud computing plus recession equals IT transformation
• Forrester: Two paths for information management pros in an economic downturn

q&a Microsoft Dynamics CRM has become a key product for the company, according to CRM division general manager Brad Wilson--and it's an area the software maker plans to invest in further.

According to Wilson, when Microsoft earlier this year committed itself to investing $1 billion annually in the construction of new data centers to support the Microsoft Live portfolio of on-demand software, some of that sum--he declined to specify how much--was earmarked for customer relationship management.

Brad Wilson is CRM division general manager at Microsoft.

(Credit: Microsoft )

Earlier this month, CNET News sister site ZDNet UK spoke to Wilson to find out how he intends to make that CRM investment and whether he thinks it will be sufficient to beat on-demand CRM leader Salesforce.com on its own turf. Wilson made it plain that, despite the SME (small and medium enterprise) bias that Microsoft CRM may have acquired, it is equally aimed at the enterprise.

Q: Microsoft has been in CRM for some time, but just how long?
Wilson: We've been in the CRM market for five and a half years, and have more than 16,000 CRM customers and more than 750,000 users.

Microsoft is investing more annually on data centers than the complete revenue of all the on-demand players--$1 billion annually. As a company, we are investing heavily.

How is that customer base made up?
Wilson: More than half of the business is international--outside the U.S.--and, although we started out as an organization focused mainly on the small and medium-sized businesses, more than half of our revenue now comes from large enterprises.

Salesforce.com is very popular, so how do you compete with it?
Wilson: We do and we have people who switch from Salesforce.com fairly routinely. But there are a number of companies that compete in this space and everyone wins some and everyone loses some.

What I like about our strategy is that Salesforce.com has a single operating model, which is that you rent it from them forever. Our software comes with a choice of either having an on-demand subscription offering or buying the software. If you talk to analysts today, they will tell you that, of all the CRM in use throughout the world, probably about 90 percent is deployed on the premises.

We want to give our customers the choice. Whether you want to go on-premises or to a cloud-based offering, the choice is yours.

Does this mean you don't find the cloud particularly valid?
Wilson: It is not so much that--and this is a somewhat controversial view--but I don't really care. I have an agnostic model: if you want to buy the CRM software, great; if you want to go ahead with on-demand, that's also great.

For us, it is a single codebase. It's literally the same software running.

There is no difference between on-premise or on the network. The only difference is how long your network cable is. I think sometimes people get too caught up in it. The world is not really binary.

What new products are coming up?
Wilson: About 11 months ago, we shipped our CRM 4.0, which is a fully multi-tenanted system that you can deploy from outside the cloud.

What we announced (earlier this month) is a new set of accelerators for CRM 4.0 (on sale December 1). These are extensions to the core system so that, when you add them to CRM 4.0, they offer capabilities such as e-service for handling Web cases. This lets customers submit cases online and check things such as status very easily.

What do you mean exactly by "cases"?
Wilson: Well, if you have a broken fridge and you want to contact the retailer or manufacturer, then you can go to the Web site and that will submit information that will flow into the CRM system and then trigger a workflow.

So e-service is really that Web interface to customer services, as opposed to the call center. What we provide is the data and the workflow to support e-service scenarios.

Another one is extended sales forecasting, which is a way to lock and manage forecasts that goes deeper than the usual sales-automation facilities.

There are new analytics in business intelligence; sales methodologies. And then there is enterprise search integration through SharePoint.

But are these new?
Wilson: We talked about them at our partner conference back in July in Houston but...we haven't had a customer launch before (this month).

So presumably these are intended to deal with the view that Microsoft has not been in the CRM market very long and that, to understand and execute sophisticated CRM, you need a specialist supplier?
Wilson: The wildly less popular ones? The ones that have had staggering adoption problems over the past 10 years? I think there is really a philosophical difference (between Microsoft and those suppliers). We are not going to give you a gigantic list of features. You know how you want to run your business.

So, for us, user adoption is key. If they (the users) are not going to use the system, you are pretty much guaranteed a failed deployment.

We give you enough flexibility so that you can run the system how you want to. So I find we will beat a classic offering from your CRM vendors on end-user adoption and platform flexibility. Those factors will far outweigh the fact that other people have more prebuilt stuff.

We went into a sales opportunity against a classic CRM vendor and measured its software. Out of the box, its software had only a 7 percent fit (only 7 percent of the software could be run without modification).

When you think about it, it is very difficult to sit in Palo Alto...and design something that is going to fit any business--a system that will work with every business in the world, whether it is in Turkey or South Africa. So the key now is flexibility. How easy is it to add the stuff we need?

I think the old model of 10 years ago, where you built a system that had a big slab of stuff that you had to adopt, has gone.

At the same time, we will still bring out our accelerators with pre-packaged software, and more and more of them. But we release them as open source. The idea is that we just put this stuff out there and let people use it. And, if our partners use it, all the better.

So are these products free?
Wilson: Yes.

But you are charging people for the software.
Wilson: You have to buy the core license but, once you have bought it, we are not going to try and nickel and dime people for bits of process and functionality. We don't believe in that.

We are taking the approach of wanting to make CRM much more affordable. Affordable in terms of TCO (total cost of ownership).

Part of that is in the core. We think we've done a pretty good job there and we keep adding pieces of incremental value through the accelerators. Even in the on-demand space, we want to go in and make it more affordable. CRM in on-demand tends to be relatively overpriced. So we want to make that price come down.

How do you charge? It is on a license basis?
Wilson: We have a server price and a user price--what we call a server license and a client-access license. The server price is nominal, relatively low and doesn't tend to go up. The primary driver of price is how many people use it.

Colin Barker of ZDNet UK reported from London.

Salesforce.com announced Thursday a 43 percent increase in third-quarter revenue, beating Wall Street's expectations.

Shares of Salesforce.com rose about 11 percent in after-hours trading to $25.30 a share. It closed the regular trading session at $22.83 a share, up nearly 4 percent.

In the period ending October 31, revenue reached $276 million, fueled by growth in the company's subscription and support business. Wall Street had been expecting Salesforce.com to generate $273.5 million, according to analysts' estimates compiled by Thomson Reuters.

The online customer relationship management (CRM) software developer posted net income of $10.1 million, or 8 cents a share, for the quarter, up from $6.5 million a year ago. That beat analysts' expectations of 7 cents a share, according to Thomson Reuters.

"In the third quarter, we continued to add customers at the same record level we did last quarter, at a time when the traditional enterprise software world was retrenching," Marc Benioff, Salesforce.com CEO, said in a statement.

Indeed. Enterprise software applications giant SAP shook the industry to the core, when it issued its third-quarter results, posting a decline in profits and yanking its projections of how it would perform for the rest of the year.

Salesforce.com, however, issued its fiscal fourth-quarter 2009 guidance for Wall Street, as well as its expectations for fiscal year 2010. The online customer relationship management software developer projected its fourth-quarter revenue will fall short of analysts' current expectations.

The company expects to generate $284 million to $285 million in revenue for the quarter. That's below Wall Street's current forecast of $289.4 million, according to Thomson Reuters. And the CRM developer anticipates earning 6 cents to 7 cents a share.

The company anticipates it will post revenue of $1.35 billion to $1.36 billion for the full fiscal year of 2010.

Longtime Oracle executive John Wookey joined SAP on Monday as executive vice president of Large Enterprise On Demand, in a move that will pit him directly against his former employer.

Former Oracle executive John Wookey has joined SAP.

(Credit: Stephen Shankland/CNET News)

Wookey, who served as Oracle's senior vice president of applications development for 12 years, left the enterprise software applications maker 13 months ago. Prior to his departure, he was responsible for Oracle's , which seeks to take the best features of its acquisitions and meld them together to create new offerings.

Under his new role, Wookey will work with several large SAP enterprise on-demand offerings, such as SAP CRM on-demand, and develop additional applications relating to that work.

"Wookey's vision, expertise, and impressive track record will not only help us take SAP to new heights, but will also further underscore our position as the world's leading enterprise software company," the company said in a statement.

And while most companies have non-compete clauses, as part of their severance package to executives, an SAP spokesman said that will not be a problem with Wookey.

Oracle declined to comment on Wookey's new role at SAP.