SugarCRM has a business model similar to that of Red Hat. It offers a free open-source version of its customer relationship management (CRM) application, Sugar Sales, on Sourceforge.net and sells licences for its enterprise version, Sugar Sales Professional, which includes additional features and services.
Smith claims her company is unique in that it gains revenue from an open-source business application, rather than middleware or an operating system. “We are one of the pioneers in (the) open-source vendor space–we provide a business tool which interacts with users, rather than just a back-end product,” Smith said.
The on-demand product will bring CRM to companies that could not use it before because of restricted IT and financial resources, Smith said. The company is hoping that the product, which will cost $39.99 per user per year, will rival the on-demand offerings of companies such as Siebel and Salesforce.com. Salesforce.com’s entire offering is on-demand, and a basic package costs $995 a year for five users, according to the company’s Web site–five times the cost of SugarCRM’s proposed offering.