SugarCRM, the open source CRM company, announced 15 consecutive quarters of growth, and posting a 30% year-over-year increase in revenue. In related news, the company has announced the completion of a $40 million equity investment by Goldman Sachs.
SugarCRM recently previewed Sugar 7, its next release, at the company’s annual SugarCon user conference, and in recent months the company has released a new HTML5-based mobile spp, and new fully private cloud instance, for companies who are skittish about multi-tenant security.
I can’t help but contrast the growth of companies like SugarCRM, Salesforce, and Amazon, that embraced the promise of cloud computing early, the recent spate of bad news from Cisco (see Cisco announces 4,000 to be laid off, and no mention of collaboration), Microsoft (see Microsoft sees worst stock drop since 2000: Welcome to the post-PC era), IBM (IBM’s future in doubt, according to Credit Suisse), and most recently, HP. This week Meg Whitman shuffled the executive ranks and posted disappointing numbers, but unsurprising to anyone connecting the dots in this industry.
At the most fundamental level, the larger and older companies have been caught wrong-footed by a tectonic change in the industry. The speed at which foreground and background computing scale is changing blindsided these dinosaurs like a climate-busting meteor. The rise of smartphones and tablets is hollowing out the PC business (foreground computing scale explosion in our proximal, “mobile” devices), and at the same time the shift to cloud computing is destroying the vanity server business that all the oldsters are fight over.
HP’s numbers, for example, were down in almost all areas — personal computers, printers, servers, data storage and networking — which sounds like a litany of woes as opposed to exciting lines of business. HP announced a partnership with Google called SMB in a Box in June, selling Android tablets integrated with Google Apps for Business and other HP software and hardware integrations (see Microsoft hedges its bets on Office 365 and Surface). But that’s a small initiative in the midst of other crumbling business lines.
“Revenue growth across the company has been very weak,” said Toni Sacconaghi, a Sanford C. Bernstein analyst, and HP’s stock is one of the lowest valued stocks in large American companies, and this “appears to reflect a permanently declining business.”
Just as buoyant cloud players like SugarCRM rise, so it seems that the leaden and slow-footed players — those that believed the enterprise architecture of PC/Server/Data Center was going to last another decade — are surely and swiftly falling.
I believe that many of these companies — especially Microsoft (see Microsoft will rise from the ashes of Windows and Surface failures) and IBM — have the software chops to transition the new architecture, one based on proximal foreground computing (so-called “mobile”) and background cloud computing, and social throughout. HP, though, is a long shot at best, like Cisco.