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Three Reasons SugarCRM beats Salesforce

by Christian Wettre on February 23, 2013

13 minute read

If you’re familiar with the top CRM systems on the market, then you undoubtedly know how big a player Salesforce is. They are widely respected and their software offers many good benefits. As a competitor delivering a very similar product, we run into Salesforce in almost every competitive situation.  We have to explain why our customer should choose SugarCRM over Salesforce.

We believe that the Salesforce tool comes with some notable problems such as cost, complexity, and lack of control. How do we know? Because a sizable number of SugarCRM customers used to be Salesforce customers.

We find these three most common reasons that our SugarCRM clients choose SugarCRM over Salesforce.

Reason 1: Cost Effectiveness

The number one reason that customers choose SugarCRM over Salesforce is subscription cost. The two applications essentially perform the same functions, but SugarCRM should be more attractive because it costs a LOT less.

For organizations with more than ten CRM users, the Enterprise edition of Salesforce is the most widely used subscription type. They have to purchase this subscription because Salesforce is very granular in how they deliver specific features, which are, in my opinion, required for modern CRM deployment. Features that are only available in the Enterprise edition of Salesforce include automated workflow, web API access, and code customization. This feature set is what allows an organization to automate processes and interact with other applications and data. Without it, you are really not able to run an effective CRM system.

The Enterprise edition of Salesforce is priced at $125 per month, or $1,500 per year per user subscription (US Customer Pricing). For 10 users, that’s $15,000 per year in license subscription costs alone.

With SugarCRM, you get more for your money. Even the lowest priced Professional Edition of SugarCRM comes with the automation feature set of workflow rules, web API access, and code level customizability. The Professional Edition of SugarCRM is priced at $35 per user per month or $420 per user per year. This is less than a third of the price of Salesforce’s comparable edition. For our 10-user example, Sugar would cost $4,200 per year compared to $15,000 per year for the equivalent Salesforce license.

In addition to license fees,  there are a number of other fees incurred by Salesforce customers. The most common that Salesforce users complain about are the data storage fees.

SugarCRM Professional Edition starts you off with 15GB of storage space that can be used for either data or documents. SugarCRM provides 30 GB in the Corporate Edition, and 60GB in the Enterprise edition.

Salesforce starts you off with 1GB of data storage and 11GB of document storage in all of their editions. They then have a formula for allocated data and document storage based on the number of users subscribed to the account. For example, in Salesforce’s Enterprise Edition, the formula is 20MB of data storage plus 612MB of document storage per user. This can be difficult to manage, and customers complain about being billed automatically after they go over their storage limit. One of our recent Salesforce to SugarCRM converts complained, that for their five user installation they paid more for data storage excess fees then they paid for their Salesforce subscription license. This was simply because they chose to archive all email related to customers in their Salesforce system.

Reason 2: Customization Tools

Users want an easily customizable CRM tool that can accommodate their business processes. Both Salesforce and SugarCRM are CRM platforms that can be completely customized and adapted to run any aspect of your organization. Salesforce sales reps are fond of disparaging SugarCRM by stating that SugarCRM requires programmers to perform customization. If this were true, we wouldn’t be seeing so many Salesforce to Sugar converts. I enjoy proving them wrong by showing the power of SugarCRM Studio. Here, an administrator can change and expand almost any aspect of SugarCRM by clicking and dragging field components.

So both Salesforce and SugarCRM are easy to use when designing a CRM user interface that mirrors the way your organization works.

But… there are times when an organization desires to design something that is unique to them, or that extends the model beyond the out-of-the box experience. Both Salesforce (if you subscribe to the Enterprise Edition) and SugarCRM are designed with that in mind and give you tools to develop almost any imaginable extension on their platform.

The two products have a difference in approach for this though. Salesforce only allows customizations through a proprietary language (Apex) that was created by them. This requires access to specialized skills that are expensive to hire or to obtain. Apex developers have no insight into the core application code or raw database information aside from access using Salesforce APIs.

Sugar, on the other hand, is built upon an open source foundation of a MySQL database and PHP scripting that is also the foundation of a large segment of modern web applications. Skilled developers are readily available, and lots of training materials exist to help you use these tool sets.

Every element of SugarCRM is available for code-level inspection by a developer and can be augmented and replaced as deemed appropriate for your organization. SugarCRM publishes development standards that ensure that your customizations are upgrade-safe and will not prevent you from upgrading to the next versions of SugarCRM.

Reason 3: Control

Customers who have invested in a CRM deployment seek greater control over the information in the system in order to gain a return on their investment. Here too, there are significant differences in the approaches offered by SugarCRM and Salesforce.

Salesforce is only available as a hosted service in the cloud. While that is clearly a popular trend among various software solutions, it is not always the only correct answer for an organization. There may be problems with cloud-hosting  in terms of access to the raw data for reporting and integration. There are security concerns presented by the nature of an organization's work and data that may not be appropriately addressed by cloud hosting.

SugarCRM offers their customers the option of hosting their CRM system in the Sugar cloud, in a private cloud such as Amazon AWS or IBM’s SmartCloud, or on your own server in your own data center. This hosting flexibility gives organizations a lot more choice, flexibility, and speed when they consider how to use their own internal skills and capabilities to extract value from, and protect the data in their SugarCRM system. We see self-hosting as a choice made by those who have invested the most in their CRM system and from our customers in sensitive industries such as Defense, Financial Services and Medical Services. With self-hosted systems, the customer has direct database level access and can deploy their own business intelligence tools against it, to report alongside CRM data. With self-hosted CRM solutions, it is easier to perform data integrations between business systems with high transaction volumes. For instance, if you need to update your CRM system with thousands of line items from your ERP system, it is a lot easier to perform this task with database-to-database queries than it is to design and execute web-API calls.

The bottom line is that, while Salesforce has a good reputation and full-feature set, SugarCRM matches the capabilities and wins the day with pricing, an open source development tool set, and greater deployment control.