Today, open-source CRM pioneer SugarCRM announced that the “interim” has been officially removed from now Chief Executive Officer Larry Augustin’s title. I had the chance to speak with him in advance of the announcement about what he is most looking forward to in his role, as well as the future he sees for open source and cloud computing.

CRM magazine: So, you’re officially chief executive officer of SugarCRM — no more interim title attached. Thoughts?

Larry Augustin: I’m excited to be here. I’ve been in the interim job since May, and just got too excited with the opportunity that I couldn’t bear to leave. First, the traction the company has is pretty amazing. Look at the number of users — 5,000 paying commercial customers in addition to 500,000 users on 50,000 systems — due to our open-source strategy.

Second, there’s the appeal to me to taking the open source business model to the application space. I’m thrilled to see [open source] evolving in the application space, and the opportunity to be part of the company help define that business model is exciting.

The third thing is we have a real opportunity with what’s happening with cloud computing today. It’s a buzzword, but we’ve got one of the few applications really designed to roll out and be used to work well on multiple cloud computing infrastructures. We’re seeing it today with the way our customers deploy the application — whether in their own data centers, internal cloud, our on-demand offering, Amazon [EC2], Rackspace, and others.

This movement to infrastructure now available as a service really gives us some interesting places we can go with the application. Being one of the first companies to look and say, “OK, we have an application that makes sense and can be deployed across different methods,” gives customers flexibility as well. It is a chance for us to be at the center of open source and cloud computing.

CRM: OK, what about other software-as-a-service (SaaS) players including Salesforce.com?
Augustin: One of the things I see as differentiating here is our philosophy that applications really need to be built in a different way for the cloud. It’s not just about offering SaaS.

Go back 15 years to client/server computing … and the application is all out there on server. You install the client, add in different desktops, different end-point devices, and of course that was complicated. Then along comes the Web and Web browser, and that becomes the universal client. When that first rolled out, infrastructure was still expensive and so was maintaining that server.

Then there was the emergence of SaaS vendors, and SaaS in that context really meant a multitenant application that ran in vendor’s data center. Think about a pendulum, swinging from client/server computing to other extreme, where the application runs entirely at the vendor in one place, one data center in a multitenant architecture. It was designed to take advantage of the notion that infrastructure is expensive and difficult to build.

With cloud computing, the pendulum has swung back toward the middle. Infrastructure is a commodity, so much so that I can within literally a second spin up new infrastructure on any number of cloud services today. The need to build that out as part of the SaaS offering goes away. So if you look at it, there is a challenge for traditional SaaS vendors effectively competing in the application space with application developers, and in the infrastructure space with cloud computer vendors.

CRM: But SugarCRM has a data center, yes?
Augustin: Yes, but we’d just as soon customers ran on someone else’s so we wouldn’t have to continue building ours out. That’s why we support others out there, as we think this gives customers a great deal of flexibility, using the service oriented architecture that works best for them.

CRM: So are there plans to eventually do away with the data center?
Augustin: To tell you truth, my suspicion is we will always have a data center. Some customers want us to host the application for them, plus we want the experience in understanding how to make the application run well in that kind of data center environment. We can use our own data center as a test, if you will, for building our own system management tools to help make our application easier to deploy and manage across data centers.

The bottom line is we’ll probably always have a data center. We want to be flexible and deliver the needs of our customers. If it makes more sense for a customer just to be hosting with another vendor, I’m fine with that. You’ll see us support a variety of hosted platforms in a significant way and provide support for that. That’s one thing very tangible there, the ease to deploy and manage across different cloud service platforms.

CRM: Do you think “traditional SaaS vendors” will be able to make this adjustment?
Augustin: I think it is difficult for them to swing toward the middle [of the pendulum]. They built the application to be run only by them. That was probably the right choice five to seven years ago, when infrastructure was expensive and everyone wanted to move into the Web. Particularly when building a new generation of applications, you want to get them out as quickly as possible. The simplest way to do it, the best way to take advantage of cost savings, was aggregating infrastructure.

What happened was that those economics changed, and the way you do that has changed. I think those vendors are leaving themselves out of a piece of the market by not enabling themselves to take advantage of the commodity of infrastructure that’s happening unless they can find a way to take the application and make it available on different platforms.

CRM: Seems as though you have a lot on your mind. In the next year, what do you feel will be the most important decision you will have to make in your role as CEO of SugarCRM?
Augustin: I think we have a lot to implement and look toward internationally, asking ourselves how to grow and expand that business and serve the market outside the United States. It’s an important piece for us, as 40 percent of our revenue already comes from Europe. That’s a significant number for a company as young as we are.

CRM: Why Europe?
Augustin: There are two trends: One, Europe leads the U.S. when it comes to open-source adoption. Two, Europe — like most places — likes the idea of moving to a Web-enabled application, but wants local control of the data and application, which plays very well into our model.

Finding and expanding our network of partners internationally is going to key for us.

CRM: What about the United States?
Augustin: There are significant and interesting things happening in the North American market, in part around cloud computing, and we definitely want to be a part of it. Whether it’s the continued expansion of services like Amazon, platforms like Microsoft Azure … there’s a lot happening there and we’re going to continue to find ways to leverage that message of cloud computing.