Sudden exit for SugarCRM co-founder and CEO
Open source and cloud no guarantee of success
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The chief executive and co-founder of one of Silicon Valley's pin ups for open-source and cloud services has suddenly resigned.
SugarCRM's John Roberts has left "to pursue other opportunities," the company said Thursday. He has been succeeded by an interim chief executive Larry Augustin. Augustin is a serial board-member and himself a former CEO - of VA Software, which became VA Linux and suffered the pain of the dot-com boom and bust.
Underlining the sudden nature of Robert's departure and how this was related to SugarCRM's business performance, Augustin said that his immediate priority is to get to know the team, customers, and partners and that he's looking forward to taking the company to the "next level."
Sources, who wished to remain anonymous, told The Reg that Roberts' future has been in question since March. The talk around the halls of San Francisco's Open-Source Business Conference (OSBC) around that time suggested it would not be long before Roberts was ousted.
Roberts helped found SugarCRM in 2004 with Jacob Taylor and Clint Orem as it turned from an open-source customer-relationship-management (CRM) project into a company. Today, SugarCRM claims 4,000 customers. Most are small and mid-sized deployments. With its on-site and on-demand PHP application, SugarCRM was considered a model start-up and held up as an example of cloud computing by Sun Microsystems' chief executive Jonathan Schwartz who frequently appeared at SugarCRM events as a keynote speaker.
SugarCRM, though, has failed to grow or develop along the same explosive trajectory of Salseforce.com, which has eclipsed SugarCRM in revenue, customer numbers, and deal size.
This will have frustrated the company's three investors in general, but even more so now that the recession is seen as good for open source and that venture capitalists find themselves increasingly stuck with start-up investments lacking an exit strategy. Investors have put $46m into SugarCRM.
Adding to the challenges for SugarCRM's backers, its operational costs are understood to be high, while the PHP-based CRM software itself is relatively complicated to install and run.
SugarCRM suffered a mysterious exodus of senior and experienced business staff in early 2008, some of which involved personal clashes with Roberts, sources told The Reg, and saw Roberts take more direct control over sales and growth.
Between January and June 2008, SugarCRM lost its director for enterprise sales Dean Warshawsky, regional vice president of sales Richard Baldwin, senior sales executive Amy Hu, and vice president of marketing Tara Spalding.
Sales and marketing people are considered expendable, but the loss of a co-founder is seen as a sign of something more troubling. And so it was Taylor left in June 2008, with senior vice president of business development Lars Nordwall going after three years at SugarCRM - one year short of Taylor. Nordwall is a veteran of Cambridge Technology partners and Novell.
SugarCRM's former team has since been spread across the industry at other start-ups, working as entrepreneurs, or joining rivals SAP and Oracle.
SugarCRM has refused to comment on the reason for the departures. ®
COMMENTS
Code and communitymatter,
..not a single person (or as someone noted - a handful of people).
Once again a "tech journalist" who probably has never written a line of code in his life is weighing in on a non-event as if it mattered to anyone really involved.
The great thing about LAMP stack apps is that they are all open - and Sugar is no different. If the company SugarCRM goes away - who cares? The project still has hundreds of thousands of supporters. In fact, in the UK there isn't even a real Sugar corporate office, and it's still going strong - the corporate side of Sugar is irrelevant to the product's success, and I'd argue the CEO even less so.
And I also agree that the comparison to Salesforce.com is silly. Two very different models and two very different cultures - I'd like to think that VCs sinking millions into a company knew what they were getting into. Expecting an open source company to see 500 million pounds in turnover a year in half the time as a proprietary SaaS company spending 100 million pounds a year in marketing - yeah, that's a feasible expectation. Let's see where SugarCRM is in a full 10 year cycle and then make comparisons (remember Salesforce took eight years to see its first profit).
I like how this writer throws out like 5 names over a few years of people sacked. Please. Has anyone here ever worked in sales? In tech startups? Turnover is part of the business. How many presidents and major VPs have left oracle, Salesforce, Siebel etc. without it seeming alarming (hello, Shai Agassi left SAP and less was made of that and he was actually the only brain in that operation for the past decade.)
In short, Gavin, pull your head out of your arse.
@Jonathan
Don't get too excited about Sugar. I've been developing commercial SugarCRM modules for several years and can tell you that the quality of Sugar's code is shockingly bad. Their appalling documentation doesn't make matters any better. Yes, you pay less initially for Sugar but their horrible framework means anything but the most mundane customizations take more time, effort (and thus money) than any decent framework.
My hope is that if someone buys Sugar they overhaul the code base, ideally porting it to something sensible like Symfony.
SugarCRM > Salesforce.com
@BoldMan - probably because salesforce.com is the closest competitor, and Sugar makes a big thing about being as good as salesforce, but a lot cheaper. (Actually they seemed to have toned this down lately -not sure why as the comparison made sense)
Having been involved in a mid-sized salesforce rollout, and later experimented with Sugar, I can safely say that with a PHP developer and a good sysadmin you can deliver 95% of the functionality of salesforce, plus some things that salesforce doesn't deliver, for less than 25% of the cost.
I'll personally be very sad to see SugarCRM go under -my experience of the SFDC team (not the developers behind the system, the ones who go to your company and implement it) is that they over-promise, under-deliver, and jump ship as soon as possible leaving you with a partial rollout and a massive bill. With SugarCRM, on the other hand, you get exactly what you pay for. More work on your side, but realistic expectations and a product you can customise to suit you.
Hopefully, SugarCRM will be bought by someone who can market it properly...
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