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SugarCRM is up against a couple of noisy competitors — Salesforce and Microsoft love to talk about their products and spend oodles on marketing every year.But the seven-year-old company has carved out a nice niche for itself: it’s been cash flow positive since 2010, and has more than one million end users, making it the third-largest CRM vendor. Billings were up 67% last year, and almost doubled in the fourth quarter.
Now, it’s about to get bigger with a $33 million funding round led by NEA.
So how do they do it?
Focus. All they do is CRM. They’re happy to let partners fill in all the other pieces that a business needs.
As CEO Larry Augustin told us, “We’re not going to do like Salesforce has done. We’re not pushing Heroku, Force.com, Rypple, Site.com or any of those things.”
As far as Microsoft goes, “They have a solution that’s an add-on to SharePoint, Exchange, and Office. If your goal is to live in Microsoft’s world, that’s naturally where you’re going to go. Today, a lot of companies have a more heterogeneous environment. A lot of people have Google Docs, or mobile solutions that are not just Windows solutions. That’s where we shine.”
Another big difference: while Salesforce and Microsoft want customers to run in their clouds, SugarCRM wants customers choose their own cloud computing provider. The app can run on Amazon Web Services, IBM SmartCloud, Rackspace, a company’s private data centre or — ironically — even Microsoft’s Windows Azure platform.
“We do host, we have a multitenant data centre. But our emphasis is moving product out to other cloud services. If I never bought another server I’d be very happy.”
Augustin also told us that the CRM market is far from full. Most of the company’s customers so far have been smaller businesses, and about 60% of them are moving from makeshift solutions for tracking customer relationships, like storing data in Excel or Google Docs.
But SugarCRM is moving upmarket, and sought this funding round to make sure it had the cash to cover the longer sales cycles that enterprises require. It’s also planning on making some “small tuck-in acquisitions” that help its core product.
The round was led by NEA, and NEA partner Brooke Seawell will join the board. The round also included new investments from Silicon Valley Bank and Gold Hill Capital.