Welcome to another in our One on One series of conversations with some of the most thought-provoking entrepreneurs, authors and experts in business today. Larry Augustin, CEO of SugarCRM, spoke with Brent Leary in this interview, which has been edited for publication. One of the group who coined the term “open source,” Larry has written and spoken extensively on open source. He is also an angel investor and advisor to many early-stage technology companies. To hear audio of the full interview, page down to the loudspeaker icon at the end of the post.
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Small Business Trends: You are the CEO of SugarCRM. Can you tell us more about your background?
Larry Augustin: I came into Sugar as CEO a little under two years ago. Prior to that I had been a board member and outside director of Sugar for a little over four years. During that period, not only was I working with Sugar, but [also with] a number of other startups, most of them with some connection to open source. I was lucky enough to work with companies like JBoss, Xen Source, SpringSource, Hyperic and recently a company called Appcelerator.
Small Business Trends: Where is open source today compared to when it first got started, and how is it benefiting folks who are starting businesses today?
Larry Augustin: Open source has made the transition from primarily developers [who are very interested in being able to set direction, take source code and build things for themselves] to something that is now very common in the commercial world. The notion that you can have control by access to the source code – that access to the source code is valuable – has made its way into how people think about business today.
For a long time, particularly in the enterprise software world, we saw a confrontational relationship between customer and vendor. [There was] a period where companies didn’t like [the software products] they were buying, never used them, never adopted them and never had a good partnership with the vendor.
Open source has the opportunity to turn the relationship between vendor and user – the consumer- into a partnership. There is one company whose primary concern is using the product in their business. There is another company whose primary concern is building, product, supporting and developing the product. But rather than adversarial, there’s a shared vision around the product.
Small Business Trends: What impact has open source had on cloud computing?
Larry Augustin: Without open source, we would have not been able to develop the models we see around cloud computing today, because one of the significant changes as we go to cloud computing is a pay-as-you-go incremental use license. Without open source to have built the cloud infrastructure, and without open source to have provided software whose licensing was flexible, we wouldn’t have cloud services.
Small Business Trends: Open source, cloud based, SAAS, whatever you like to call it – why has CRM been such a driver and such a success when it comes to these kinds of deliveries?
Larry Augustin: CRM is one of those applications that every [business] wants. If I have a business, I have salespeople, I have customers and I need to enable my sales team to understand my customers. As you look at the capabilities of open source, there is an opportunity to partner with a customer around a piece of software that everyone needs. The customer has a lot of ideas about what the software should look like. We need to take those in and create an experience for the customer that makes them excited about the software.
CRM is one of the first steps for open source into a business application. Historically most open source has been focused around the infrastructure parts of the software stack. With CRM we’ve taken a plunge into a business application. [This is] a great opportunity for open source to show that we can benefit all business buyers, not just the IT buyer.
Small Business Trends: Looking at the area of social CRM, what impact has the need to integrate social had on open source and on companies looking for CRM help?
Larry Augustin: Customers are using social networks to talk about businesses. It used to be that a company had a pretty good chance of controlling their message. Messages came to consumers thorough certain kinds of media, be it newspapers, TV or radio. Today, that’s completely turned around. Consumers trust other consumers, and social networks have enabled them to exchange information. Today the trusted source of information about a vendor or product is not the vendor, but the fellow consumers. To get their message across to the consumer, [businesses] have to participate, integrate and connect with those social networks.
We have to enable a salesperson at a company to understand what their customer, contact or prospect is saying about them on a social network. For example, at SugarCRM, we have integration with common social networking services like Facebook, Twitter and LinkedIn. Many social networking services were built using open source software. The open nature of those platforms has enabled us to make those integrations necessary to bring social from the consumer network into the enterprise and allow the enterprise to communicate with those customers.
Small Business Trends: Let’s look into the future, a year or two from now. What role does open source play in this social economy we seem to be building?
Larry Augustin: Open source goes in only one direction, and that’s forward. Once code is out there, it’s available for everyone to use. As a result, there is always more and more to build on.
Combine that with the cloud services open source has enabled, and the kinds of things we are seeing with social networking today are just the tip of the iceberg of what people are going to be able to create. Open source combined with cloud computing makes it very, very easy for someone that has the next great idea to make it available very, very quickly.
Small Business Trends: Where can people learn more about Sugar?
Larry Augustin: At SugarCRM.com they can see what we are up to and take things for a test drive. If you are a small or medium-sized business, we have a product that’s a great fit. They can also check out our annual user and developer conference April 4th – 6th in San Francisco.
This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.