SugarCRM targets business managers, not IT

Chief information officers relegated to 'veto factor'.

Line-of-business owners have become a core target for customer relationship management software sales, displacing CIOs and IT managers as a mere “veto factor” in the procurement process, according to software vendor SugarCRM.

The US company’s co-founder and chief technology officer, Clint Oram, said the company had seen a shift in sales from CIOs to sales professionals eagerly looking to replace spreadsheets with the software.

“I think what we’re seeing right across the board is the line-of-business is looking for a solution that’s driving the purchasing process,” he said.

“IT might be a bit more in the procurement side of things or a bit more as a veto factor as opposed to making a decision about which solution they’re actually going with.”

In recent years, vendors, regulators and IT managers have warned of the risks and data governance issues associated with “rogue” cloud deployments, commissioned by various business units without the approval of IT.

Certain Australian organisations have blocked access to unwanted cloud providers' websites from within the corporate network. Others have introduced enterprise-wide policies to balance the convenience of those services with control.

New sales drive

The sales process is a change for SugarCRM, which has previously pitched the open source version of its software to small and medium businesses.

Last week, the company announced that it had raised $US33 million ($A32 million) in a equity and debt financing round, to be used to pursue the enterprise IT market and "strategic business opportunities".

SugarCRM vendor has 600 customers in Australia and New Zealand, most of which are evenly split between the company’s on-demand cloud platform, its channel program and on-premise deployments.

Australia/New Zealand country manager Tony Hughes said the average local deployment was “a little lower than 20 seats”, but the company has recently won business with an Australian company aiming for 1400 seats as well as a multi-national whose business could see 7000 seats deployed on the software in Australia alone.

It counts customers including Macquarie University, Trans-Tasman Business Circle and Telcoinabox. The latter dumped a nine-month Salesforce.com deployment after “what they said they could do and the customisation required didn’t match what the reality was”, according to co-founder Damian Kay.

Hughes said the difference between IT professionals and line-of-business managers during the sales professional had slowly dissipated.

“It’s relatively new. Historically IT people were buying products and business people were buying business solutions and there’s often a gap but I’m seeing that gap close,” he said.