http://bit.ly/CRMCalculatorTCO - - - - - Download our FREE TCO Calculator Tool for CRM Executive Summary • Software-as-a-Service (SaaS) has evolved over the past 15 years through three distinct phases: the Application Service Provider (ASP) model, multitenant SaaS and now distributed SaaS. –– The ASP model pioneered the concept of SaaS, but was ultimately an inefficient and expensive model, with high cost of components and expensive customization. ––Multi-tenant SaaS improved upon the ASP model’s drawbacks. But multitenancy lacked deployment flexibility, significantly reduced data control by the customer, and the benefits of this lock-in model are mostly to the vendor, not the customer. ––Multi-tenant SaaS applications, and similar vendor-hosted application service delivery platforms are not cloud computing platforms. Much hype has been made around cloud computing, with much of this being made by multi-tenant SaaS providers incorrectly labeling their offerings as being cloud computing. –– Vendor-hosted SaaS has its place in the CRM and application software spectrum in general. Organizations seeking less complexity, or otherwise needing little control over where the application and data are hosted are prime candidates for vendor-hosted SaaS. • SugarCRM’s deployment value proposition is inclusive of several options, including vendor hosted-SaaS supplied by SugarCRM and cloud-based delivery options powered by the Sugar Open Cloud ecosystem. –– The Sugar Open Cloud ecosystem is made up of various cloud service partners and private environments. These include regional service providers, as well as global cloud platforms such as Microsoft Azure or Amazon EC2. The benefit to end users in the Open Cloud environment is choice as well as the flexibility to port between these environments based upon changing business needs. –– In addition to avoiding vendor lock-in scenarios, organizations deploying SugarCRM applications in the Open Cloud ecosystem can have greater access to the application for customization and integration needs, as well as greater data access and ownership than they see in proprietary, vendor- hosted SaaS environments. ––Using Sugar Cloud Console, SugarCRM remotely monitors and manages the applications, regardless whether they are hosted in Sugar On-Demand, a partner cloud or a customer’s private cloud.

1. Sugar C R M E xecu t i ve B r i e f
The Sugar Open Cloud
Distributed SaaS Enabled by Cloud Computing

2. The Sugar Open Cloud: Distributed SaaS Enabled by Cloud Computing
Executive Summary
• Software-as-a-Service (SaaS) has evolved over the past 15 years through
three distinct phases: the Application Service Provider (ASP) model, multi-
tenant SaaS and now distributed SaaS.
–– The ASP model pioneered the concept of SaaS, but was ultimately an
inefficient and expensive model, with high cost of components and
expensive customization.
–– Multi-tenant SaaS improved upon the ASP model’s drawbacks. But multi-
tenancy lacked deployment flexibility, significantly reduced data control by
the customer, and the benefits of this lock-in model are mostly to the ven-
dor, not the customer.
–– Multi-tenant SaaS applications, and similar vendor-hosted application ser-
vice delivery platforms are not cloud computing platforms. Much hype has
been made around cloud computing, with much of this being made by
multi-tenant SaaS providers incorrectly labeling their offerings as being
cloud computing.
–– Vendor-hosted SaaS has its place in the CRM and application software
spectrum in general. Organizations seeking less complexity, or otherwise
needing little control over where the application and data are hosted are
prime candidates for vendor-hosted SaaS.
• SugarCRM’s deployment value proposition is inclusive of several options,
including vendor hosted-SaaS supplied by SugarCRM and cloud-based
delivery options powered by the Sugar Open Cloud ecosystem.
–– The Sugar Open Cloud ecosystem is made up of various cloud service
partners and private environments. These include regional service provid-
ers, as well as global cloud platforms such as Microsoft Azure or Amazon
EC2. The benefit to end users in the Open Cloud environment is choice as
well as the flexibility to port between these environments based upon
changing business needs.
–– In addition to avoiding vendor lock-in scenarios, organizations deploying
SugarCRM applications in the Open Cloud ecosystem can have greater
access to the application for customization and integration needs, as well
as greater data access and ownership than they see in proprietary, ven-
dor-hosted SaaS environments.
–– Using Sugar Cloud Console, SugarCRM remotely monitors and manages
the applications, regardless whether they are hosted in Sugar
On-Demand, a partner cloud or a customer’s private cloud.
Software-as-a-Service (SaaS) and cloud computing are hot topics because they
allow companies to better manage their IT investments. As the concept of hosted
applications evolved over the last 15 years, providers of Customer Relationship
Management (CRM) software and customers alike have embraced the SaaS or
what is also called the “on-demand” model of deploying business applications.
There are a lot of benefits certain organizations will see from SaaS CRM software.
But the SaaS models of the past have also had significant drawbacks.
This is changing. SugarCRM is at the forefront of innovation regarding SaaS and
cloud computing. Leveraging a distributed SaaS architectural design, the Sugar
Open Cloud provides greater choice and flexibility to end users, IT administra-
tors, as well as Sugar partners and cloud service providers.
Before outlining the unique benefits of the Sugar Open Cloud, it is important to
examine how SaaS has evolved over the years. And, it is important to note how
SugarCRM’s unique take on the distributed SaaS architecture solves a lot of the
issues and user-related problems inherent in SaaS software in previous itera-
tions of the model.
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SugarCRM Executive Brief

3. The Sugar Open Cloud: Distributed SaaS Enabled by Cloud Computing
The Evolution of On-Demand Applications
With the rise of the Internet in the mid-1990s, a few companies emerged with
a new outsourced IT model for delivering software called ASPs (Application The ASP model has many
Service Providers). The ASP model was a managed services model, where
companies bought their licenses as they would if running them on their own downsides. It eliminates
site, but paid additional fees to the ASP to manage and maintain the applica-
tions. These application deployments were managed by the ASP on a users’ choices. Users can
one-to-one basis, and were delivered over the pre-broadband Internet.
Economies of scale were impossible to reach, and thus these companies choose the application to
faded away as financially unviable.
deploy, but not the
The ASP Model infrastructure hardware
Pros • Provides a turnkey application system or network used in the
• Little IT infrastructure needed by end users
• More predictable IT costs deployment. Also,
Cons • Expensive in the long run, monolithic, inefficient
customization is much
• Integration costly or impossible
• Users have zero ownership of the application more limited and
Key Providers • Corio
• USi expensive.
The end of the 1990s brought a new concept of hosted application delivery.
More ubiquitous Internet connectivity and a general understanding that the
web would be the focal point of most software development led this new
model. New advances allowed vendors to create a single hosted application
instance that segregated application logic and data. This design approach
allowed vendors to manage one monolithic application instance shared by all
customers, rather than have to fully provision a full instance for each customer.
Called “multi-tenancy,” several new application vendors began pushing a fla-
vor of this concept. CRM providers were at the forefront of this model. And
unlike the ASP model, where the managed service provider was simply a
middleman of sorts, the vendors pushing multi-tenant SaaS products are
both application developer and service provider. The model has some advan-
tages, in that it allows the vendor to scale operations and manage customer
upgrades and routine maintenance more cost effectively. However, multi-ten-
ancy as a single deployment choice has drawbacks. These include very
limited customization flexibility as well as data control issues. In essence,
users traded freedom and flexibility for standardized CRM.
1995 1999 2009
1st Gen—ASP 2nd Gen—Multi-tenant SaaS 3rd Gen—Distributed SaaS
• Introduced concept of • Validated On Demand as a software delivery model • Optimized SaaS delivery model with all the benefits
hosted turnkey applica- • Fast to deploy of on-site software
tions • Big economies of scale for vendors but limiting • Fast deployment at low risk
• Inefficient due to lack of the choice of customers • Deep configuration and customization capabilities
economies of scale • Little to no true customization capabilities • Ideal for all types and levels of deployments from
• Costly for vendor and user • Not ideal for complex deployments simple to complex, from small to large
• Single large datacenter using the Internet as • Takes full advantage of cloud computing
access pipe • Customer can deploy in vendor, partner or private cloud
• The user has control over their CRM deployment with
the ability to move it between different clouds as their
needs evolve
Application delivery over the web has evolved from early, inefficient models towards robust, yet cost-effective platforms powered by cloud computing
and open source technologies.
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SugarCRM Executive Brief

4. The Sugar Open Cloud: Distributed SaaS Enabled by Cloud Computing
Multi-Tenant SaaS
Pros • Lower subscription costs for end users
• Upgrades are automatic and relatively seamless
• Lower risk than with client/server investments
• Easier administration for SaaS providers
Cons • User has little control over the application
• True customization is impossible
“We believe that the • Integration with other internal systems severely limited
benefits of a multi-tenant • Critical data on shared databases/servers outside the firewall
• Downtimes effect all users
architecture (MTA) accrue Key • Salesforce.com
Providers • NetSuite
primarily to the vendor. • Microsoft Dynamics Online
These vendors offer end
In recent years, several shifts have helped evolve the architectural design of SaaS
users less flexible software applications. Open source software, a marked drop in server software costs, sig-
nificant advances in software infrastructure management tools coupled with a
than a hosted model in move toward cloud computing, has opened up a great opportunity for software
providers. Now, software vendors need not rely on a limited multi-tenant archi-
order to reduce the tecture to reduce internal costs while also delivering lower cost software to their
customers. In addition, the ecosystem of service providers delivering SaaS appli-
technical and administrative cations has expanded greatly beyond just the original software vendor.
costs associated with
SugarCRM has taken the lead in creating distributed SaaS software offerings that
supporting the unique promote greater user control, as well as deliver the flexibility and freedom lost
with multi-tenant SaaS. SugarCRM’s use of open source components inside its
requirements of multiple distributed SaaS infrastructure and its innovative application design have resulted
in a highly scalable, affordable and flexible offering. The distributed SaaS design
customers. MTA is allows the service providers delivering SugarCRM software to provide customers
appropriate at the low end with greater control over their application deployment and greater access to their
data than users of older multi-tenant SaaS products.
of the market, where
The architectural design behind this global network of SaaS CRM providers is
customers are comfortable called Distributed SaaS. The benefits can be seen below:
deferring to the vendor for
Legacy Multi-Tenant Multi-Instance
best practices.” Vendor Hosted SaaS Distributed SaaS
Single datacenter using the Cloud computing using the
Internet as an access pipe for Internet as the platform for
Internet Model
Peter Goldmacher vendor centric CRM customer centric CRM
Cowen and Company applications applications
Vendor-hosted, partner
Deployment Options Single vendor-hosted only
hosted, private-hosted
Multi-instance dedicated
Database Tenancy Multi-tenant shared database
database
Proprietary with a limited Web-native open source
Development Language
number of developers (PHP)
Development Process Closed Open
APIs Narrow, proprietary Open, standards based
Limited with no database Deep with full database
Customization
access access
On-demand Architecture Monolithic Distributed
Hardware Proprietary Commodity
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SugarCRM Executive Brief

5. The Sugar Open Cloud: Distributed SaaS Enabled by Cloud Computing
Cloud Computing and SaaS: Hype Versus Reality
While vendor-hosted SaaS models have co-opted the “cloud” buzzword to
describe their offerings, it is important to realize that these offerings are not
cloud environments. Multi-tenant SaaS offerings lack essential elements of
cloud computing such as elastic scalability of compute resources from storage
to processors to bandwidth. The lock-in models of vendor-only SaaS compa-
nies makes it impossible for users to port their data and applications to another
cloud service environment. Choice and flexibility are eliminated. Simply put,
vendor-hosted SaaS offerings are not actually cloud computing platforms, but
rather traditional multi-tenant SaaS products rebranded to leverage a technol-
ogy buzzword and trend.
SugarCRM has taken the lead in developing distributed SaaS CRM applica-
tions based on the choice and flexibility delivered by open source software and
cloud computing. While SugarCRM’s vendor- and partner-hosted offering is
similar to older multi-tenant SaaS products in that both are software-as-a-ser-
vice, SugarCRM’s products are not limited to a single vendor-only deployment
model. Instead, end-user organizations purchase SugarCRM products directly
from SugarCRM Inc. or from local service providers who can work closely with
the end-user to meet the most stringent of application and data management
needs. The underlying flexibility of the open source SugarCRM architecture
allows for multiple deployment options across different cloud computing plat-
A key tenet of Cloud
forms—and the ability for end-user organizations to move between these Computing is the ability to
deployments as their needs evolve.
move and orchestrate
The Sugar Open Cloud: Benefiting End User Organizations
applications across cloud
The Sugar Open Cloud is the logical evolution of the distributed SaaS model. environments.
The Sugar Open Cloud encompasses all of the distributed SaaS environ-
ments that host SugarCRM applications. These include the Sugar On-Demand
environment hosted by SugarCRM; private clouds managed by enterprises of
all sizes; end-user organizations choosing to run in public cloud environ-
ments such as Microsoft Azure or Amazon EC2; and also partner-hosted
SaaS offerings delivered leading service providers like British Telecom in the
UK, Tata Communications in India and Redpill-Linpro in the Nordics.
Why is this important? First, CRM applications do not operate in a vacuum;
they are dynamic integrations of business processes across Sales, Support
and Marketing organizations. As customers grow more mature in their use of
the CRM application, these dynamic integrations become more complex and
move across the different businesses of the organization. Application level inte-
grations become critical with systems in support, marketing, HR, finance,
manufacturing and engineering. Demanding legacy IT environments often
require application flexibility not possible with legacy vendor-hosted providers.
Second, data management is a critical business driver. Many end-user
organizations look to their customer data as a strategic asset that they don’t
want stored outside their firewall. In some cases, regional data privacy reg-
ulations require SaaS providers to store end-user’s data within the country
of origin. And other end-user organizations are simply more comfortable
with a local service provider they know and trust managing their sensitive
customer data. Vendor-hosted SaaS providers have no answer to any of
these user requirements.
As a customer’s CRM system matures and increases in complexity, the
deployment requirements may change. The customer may want to move the
CRM application from the Sugar On-Demand environment to a partner-man-
aged cloud to gain greater access to the application without having to manage
underlying infrastructure. Or the customer may want to move the CRM appli-
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SugarCRM Executive Brief

6. The Sugar Open Cloud: Distributed SaaS Enabled by Cloud Computing
cation on-site in the customer’s own private cloud to integrate with other
on-site applications or to comply with regulatory and privacy requirements.
The flexibility here is an invaluable benefit to end-user organizations: increasing
control and the ability to create a differentiated user experience, while decreas-
ing the overall risks associated with a CRM deployment. So, with the SugarCRM
distributed SaaS architecture powering the Open Cloud, customers can seam-
lessly move between these clouds; a flexibility unique to SugarCRM.
SugarCRM on the Open Cloud
Pros • Fast deployment
• Lower risk
• Deep ability to customize, not just configure the appli-
cation
• Easier access to your CRM data
• Ensure the uptime, performance and security you
require is in place
• User gains more control over the CRM solution
• User can move the CRM application between sugar,
partner and private cloud
• CRM application evolves with customer’s needs and
True cloud applications maturity level
negate the Importance of Cons • None, distributed SaaS allows users to reap all the
benefits of SaaS, with all the control and customization
location, allowing delivery of an on-site deployment
• Distributed SaaS also gives customers the choice and
by vendors, partners or freedom to move their deployment as their needs and
requirements change
other cloud providers.
Key Providers • SugarCRM and its Extended Partner Network
The SugarCRM Open Cloud Ecosystem: Benefiting Partners
Just as open source brings freedom of choice into the application development
cycle, cloud computing brings freedom of choice into the application deploy-
ment lifecycle for SugarCRM customers and partners. In the first phases of
SaaS (ASP and multi-tenant SaaS models) customers had no options around
who hosted their business applications as the software vendor was the only
service provider. A single vendor operated and managed the network, the data-
center, the software and access to the data, effectively locking-in customers
and removing freedom of choice. End-user organizations had no choice in find-
ing the right service provider that could meet their uptime, performance,
integration and data access needs while still providing the same best-in-class
business application the organization had come to rely on.
The days of CRM vendor lock-in are now gone. The Sugar Open Cloud offers
customers choices that didn’t exist prior to distributed SaaS. Sugar Open
Cloud partners include service providers and value-added resellers (VARs)
around the globe. These partners are taking advantage of existing infrastruc-
ture investments and new cloud computing platforms to deploy and manage a
variety of SugarCRM SaaS offerings.
There are a number of ways SugarCRM end-users can leverage Open Cloud
partners. Two examples come in the form of SugarCRM partners, Levementum
and Tata Communications. Levementum, a North America-based value-added
reseller, provides a SugarCRM SaaS offering deployed in the highly scalable
Amazon EC2 cloud computing environment. Tata Communications is leverag-
ing its existing datacenter infrastructure and SugarCRM to provide the Tata
CRM On-Demand offering tailored to the India market. Tata CRM On-Demand
not only provides the superior performance and data management service level
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SugarCRM Executive Brief

7. The Sugar Open Cloud: Distributed SaaS Enabled by Cloud Computing
agreements demanded by customers in India, but Tata is also a brand name
trusted in its local market.
With distributed SaaS, end user organizations benefit greatly from freedom of
choice and no vendor lock-in. Depending on the level of customization, data
ownership and access, or simple preference—organizations can match their
application needs with a deployment model that perfectly fits their objectives.
VENDOR PUBLIC
PARTNER
PRIVATE
With Distributed SaaS, end users take advantage of the freedom to choose between private, public and vendor cloud deployment options.
Conclusions
The decision to deploy CRM is an important one. The decision whether to go
with a multi-tenant or distributed SaaS deployment is even more important.
Customers should look for the most flexible deployment model that provides
them with the most options as their CRM implementation matures and
becomes the cornerstone of an customer-centric IT strategy. Fortunately,
SugarCRM gives its users the low risk, fast deployment benefits that other
SaaS products offer, but with several added benefits such as deeper custom-
ization capabilities and greater access and control over their data. And while
most SaaS vendors do not give options in terms of moving the deployment
between different cloud computing environments (vendor-hosted SaaS, part-
ner cloud or a private cloud) this capability is core to choosing SugarCRM.
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SugarCRM Executive Brief

8. The Sugar Open Cloud: Distributed SaaS Enabled by Cloud Computing
Sugar Cloud Console: Powering Distributed SaaS
SugarCRM enables Sugar Open Cloud partners with a SaaS management utility called Sugar Cloud
Console that automates the management of tens of thousands of Sugar instances for end-user organi-
zations. Partners use Cloud Console to manage the automated provisioning and maintenance of Sugar
application templates that incorporate pre-defined language, currency and industry vertical configura-
tions—all managed via Web service API’s or from a central administrative user interface.
Sugar Cloud Console provides the ability to deploy and manage multiple Sugar instances efficiently
while reducing costs associated with creating, supporting, upgrading, and maintaining these instances.
For example, Sugar administrators need to automate the management of various customer environ-
ments ranging from live instances to production instances to development and test sandbox instances.
They must also manage upgrades and customizations as instances move from sandbox into produc-
tion. All of these tasks are automated with Cloud Console.
In addition, Sugar partners leverage Cloud Console to create a varied, yet highly streamlined SaaS
delivery model. A Sugar partner can manage multiple templates of SugarCRM tailored to specific indus-
try verticals or geographies. Cloud Console allows the Sugar partner to more efficiently manage many
different SaaS instances based on several SugarCRM templates—without having to manage each end-
user deployments individually in a time consuming and costly manner.
CREATE MANAGE MONITOR REPORT
• Application Templates • User Management • License Management • Auditing
• Instance Cloning • Application Testing • System Performance • System Reports
• Sandbox • Updates • Activity Reports • Performance Dashboards
• Subscription management • Archiving
Sugar Professional Sugar Professional Sugar Enterprise Sugar Enterprise Sugar Professional
[Manufacturing] [Telecom] [Technology] [Media] [Public Sector]
The above diagram shows how Sugar partners can leverage Cloud Console to more efficiently manage varied SaaS applications in a one-to-
many fashion; driving efficiencies and scale into a distributed SaaS model.
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SugarCRM Executive Brief

9. SugarCRM, Inc. • 10050 North Wolfe Road • SW2-130 • Cupertino, CA 95014
www.sugarcrm.com • T: +1.408.454.6900 • F: +1.408.873.2872
04-09-028 Copyright © 2009 SugarCRM, Inc. All rights reserved. SugarCRM and the SugarCRM logo are registered trademarks of SugarCRM Inc. in the United States, the European Union and other countries. All other trademarks are the
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