August 27, 2007 / 5:29 PM / 12 years ago

CORRECTED-Customer relation software co. SugarCRM revs jump

(Corrects last name of CEO to Roberts from Bolton throughout)

By Jim Finkle

BOSTON, Aug 24 (Reuters) - SugarCRM Inc., a start-up using open-source software to challenge customer management industry leader, expects revenue to more than double this year to about $15 million, the company’s chief executive said on Friday.

CEO John Roberts also said that his company was cash-flow positive in its most recent quarter. He declined to provide further financial data.

SugarCRM was set up three years ago in Cupertino, California, to target the same business area as Inc. (CRM.N), whose programs help corporations track sales leads and run marketing activities.

Wall Street analysts on average expect Salesforce to post revenue of $734 million in the current fiscal year.

The company distributes its products over the Internet, hosting software on behalf of its clients.

SugarCRM uses that method and also sells software that companies can run on their own computers.

But in contrast to bigger rivals, which include software giants Oracle Corp. ORCL.O and SAP AG SAGP.DE, SugarCRM is an open-source company that gives much of its software away for free and in return reaps improvements from clients and allies.

Open source companies - including Linux software developers Red Hat Inc. RHT.N and Novell Inc. NOVL.O - generally publish two types of software.

One can be downloaded off the Internet and used at no charge, but doesn’t include any support from the product’s developer. The other include such services, and companies charge for it.

Red Hat and Novell have created widely used versions of Linux, and International Business Machines Corp. (IBM.N) is one of the biggest resellers of both.

But it is unclear whether open source software for managing sales and marketing will become as widely entrenched as the Linux operating system.

Only a handful of large corporations count themselves among SugarCRM’s paid customers. Roberts said that his largest clients include Ascent Media, Portugal Telecom and Royal Bank of Canada.

The company’s three main investors are venture capital firms Draper Fisher Jurvetson, Walden International and New Enterprise Associates.

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