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Chuck Schaeffer vtiger Solution Brief

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Open Source CRM vtiger Gaining Momentum

vtiger is an open source CRM software solution which despite a mature product, global presence and use by over a 100,000 companies, often has a tough time escaping the shadows of competitor SugarCRM. An interestingly, while vtiger was created from a fork of SugarCRM 1.0, the competing applications have since pursued different strategies, open source approaches and product directions.

vtiger began as an experiment by AdventNet (today Zoho Corp). Company executives closely watched the rise of open source operating systems and databases, and planned to capitalize on what they believed would come next —open source business applications. After concluding that CRM made sense for their open source debut, on December 31, 2004, they forked version 1.0 of SugarCRM and began a new journey. Seemingly surprised, SugarCRM reacted negatively, and subsequently modified their open source licensing to limit such occurrences from repeating.

In the early years the company’s revenue model was built around customer support and professional services such as implementation, integration and customization. In 2009 the company jumped into the SaaS market full steam and today the company is approaching 1,000 cloud CRM customers. The cloud CRM service is giving the company a new opportunity to scale.

The vtiger CRM solution is targeted to SMB’s, who are often without internal IT resources. The company’s largest customer concentration resides in the U.S., with about 40 percent of all customers located in America, about 30-40% of customers located in Europe and the remaining being widely distributed around the world.

The application includes the traditional CRM software tenants of sales, marketing and service, while also including less traditional functions such as quotes and sale order processing, inventory/products, billing and project management. The CRM application is a global system available in 16 languages and with multiple currency support. Mobility is supported on iOS (iPhone and iPad) and Android devices.

Social CRM capabilities include tag clouds and a basic ability to distribute tweets from within the CRM system. Social CRM is lacking with vtiger, although high on the company’s product road map with an expected release to at least partially remedy this limitation.

There is an online vtiger ecosystem of free and fee-based integrated third party products. While this marketplace is well organized and includes social features such as ratings and user reviews, its somewhat limited in scope. The vtiger communities have reached a critical mass — about 50K users in forums and about 2K developers — however active participation remains light.

Vtiger CRM is a native thin-client, browser-based application built on the LAMP/WAMP (Linux/Windows, Apache, MySQL and PHP) stack. Development is largely done in Bangalore, India with periodic contributions by the open source community. Cloud CRM delivery is hosted from Amazon in the U.S. and the company’s subscription agreement backs a 99.9 percent uptime commitment with financial credits.

vtiger Strengths:

  • The financial value proposition of vtiger is hard to beat. Rich feature sets at an extremely low price point make this a very strong value. vtiger pricing for the SaaS solution is a simple $12 per user per month and without long-term contracts. There is also a 30 day free trial available.
  • vtiger is pursuing a path of simplicity in terms of download, deployment and operation. This is welcome news for SMBs who typically use about one-third (at most) of their CRM system capabilities and are then forced to navigate through the remaining two-thirds of the application they have no use for. The application is intuitive and a new UI extends ease of use with consumer-like technologies.
  • Open source purists prefer the vtiger open source license over competitor and commercial open source CRM products.
  • We were able to contact several vtiger users. Most use the product without outside help and are very happy with the solution.

vtiger Weaknesses:

  • For on-premise deployments, the installation of vtiger is a technical endeavor, and outside the comfort zone of many non-technical CRM adopters. The CRM download and install is performed from a HTML/PHP interface, and customer forums show at times may not always be without glitches. In my recent conversation with Sreenivas Kanumuru, vtiger CEO, he indicates there is a near-term development effort to better package the deployment and remove this barrier to initial adoption.
  • The vtiger community is in need of more formal organization, structure, sponsorship and growth. Both the developer community (individuals and ISVs) and distribution community (integrators, service providers, partners, resellers, distributors) are far fewer than they should be. Actively supporting partner programs, certifications, collaboration and promotion are essential for open source publishers to scale, and an underlying critical success factor if vtiger is going to achieve its growth aspirations.
  • vtiger's company direction and product roadmap are unclear. CRM software buyers are generally making long term investments and seek clarity in terms of company and product evolution.
  • vtiger lacks visibility among CRM software buyers. The company’s messaging and promotion is difficult to find and most CRM software buyers, even open source CRM software buyers, fail to identify vtiger as an option.

vtiger CRM at a Crossroads

Make no mistake—the open source CRM market is alive and well. While growth has been limited compared to some commercial CRM software leaders, the open source adoption trajectory is clearly accelerating at an increased pace. The challenge for vtiger is to simultaneously advance their product and increase their market visibility if they expect to tap into the growth of the broader industry. The company is at a precarious point. Getting in front of this growth market can accelerate the company to a never before realized pace. Or alternatively, failing to secure their portion of the rising market will most certainly further obscure their offering and leave the open source CRM market to a single publisher. End

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vtiger is pursuing a path of simplicity in terms of download, deployment and operation. This is welcome news for SMBs who most often use about one-third (at most) of their CRM software capabilities and are then forced to navigate through the remaining two-thirds of the application they have no use for.


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