Will cloud killed on-premise CRM? SugarCRM doesn't think so

Vendor says it's seeing growth in private cloud and on-prem CRM

Despite the growth of customer relationship management software-as-a-service, SugarCRM says on-premise deployment of CRM shows no sign of dying.

According to Wayne Goss, the company's Asia Pacific vice-president, the company has seen growth in CRM deployments on on-premise hardware and in private clouds. That includes existing SugarCRM customers switching away from public cloud-based SaaS deployments to on-prem.

The company achieved 37 per cent growth in the region in 2014, Goss said.

Goss said that as the company wins more enterprise customers, he expects to see growth in the proportion of SugarCRM customers opting for on-prem over public cloud services, which are delivered either by SugarCRM itself or by its partners.

"Out of our top 20 customers in APAC, 19 out of 20 of those are on-premise or private cloud," he said.

"They demand to have control over their data and to have visibility of where there data is. And the one [customer] that's not — that's using our on-demand public cloud offering — is in the process of moving into a private cloud."

"What we're seeing is the SMBs — the small and medium customers — teed to be comfortable using public cloud services," Goss said.

"As we get more enterprise customers I would see the proportion of users would be greater towards private and on-premise than towards public cloud."

"If I wound the clock back five years ago here in Australia, it would be more like 60 per cent on-demand and 40 per cent on premise," he added.

"Now it's definitely more 70 per cent either private or on-premise and 30 per cent on-demand and I think it will continue to trend towards more on-premise and private cloud."

Goss said that he believes SugarCRM's on-premise growth was driven both by regulatory and compliance requirements facing some enterprises, particularly in financial services and government, as well as the increasing value placed on customer data to drive business decisions.

"As the importance of customer insights and customer relationship bubbles up to the CEO and you get the advent of the chief digital officer and the chief revenue officer and the customer success officer — that's driving up the importance of that and therefore there is this 'Oh wait a minute — if the customer information's so valuable we need to make sure we have control of it and it's secure.'"

Across the Asia Pacific and Japan SugarCRM's enterprise customers include a number of large technology companies, including HTC, Panasonic and Samsung. In Australia and New Zealand, enterprise customers are "an interesting mix," Goss said.

"We've got some good penetration in media," the SugarCRM executive said, citing the example of Seven West Media and Adshel in Australia and NZ's GrabOne, which is owned by APN. The CRM vendor also has some significant tertiary education customers, including a 6000-user deployment at Macquarie University, and financial services.

The customer mix in the region has tended to be informed to a degree by Sugar's partners, Goss said.

"Some partners are very focussed on tertiary, some are focussed on financial services, some are focussed on media.

"It's informed historically by our partners, by our channel, but now as Sugar becomes much more active as a vendor in the region, we're starting to drive the agenda in as far as where we're focussing our energy and where the greatest opportunities are for us."

The software vendor has also gained some traction in government at both federal and state levels, including in Queensland and Victoria, Goss said.