Microsoft Teams With SugarCRM

Microsoft has formed a partnership with rival SugarCRM, the latest in a rising number of alliances between proprietary software giants and open-source companies.

At the Open Source Business Conference West in San Francisco Tuesday, Microsoft and SugarCRM unveiled plans to enhance interoperability between Microsoft Windows Server and the open-source CRM vendor’s products.

Plans call for SugarCRM in early summer to deliver a distribution of its upcoming SugarSuite 4.5 platform optimized for key Windows Server services, including Active Directory, Internet Information Server and SQL Server, said John Roberts, CEO of Cupertino, Calif-based SugarCRM. The distribution will be released under the Microsoft Community License, one of three licenses offered in Microsoft's Shared Source initiative.

Microsoft and SugarCRM said the technical cooperation and Microsoft-sanctioned license give their mutual customers--those who wish to run open-source applications on Windows--additional comfort and benefit. They estimated that nearly 35 percent of current SugarCRM users run the software on Windows.

Historically, the proprietary and open-source software worlds have been at odds. Vendors and customers that backed open-source platforms expressed a desire to run open-source applications on operating systems such as Linux in order to break free of the licensing restrictions of proprietary platforms like Windows and Unix.

But as open-source applications, such as JBoss and SugarCRM, have gained popularity, traditional proprietary software companies like IBM, Microsoft and Oracle have rushed in to capitalize on--rather than fight--the new regime of open-source competitors.

On Tuesday, Oracle said it acquired Sleepycat Software, an open-source database maker. The deal came in the wake of published reports last week that said Oracle was in negotiations to buy JBoss for as much as $400 million and was eyeing other open-source firms.

IBM, a pioneer in the open-source space, has formed partnerships with many open-source projects, notably Linux, and was instrumental in the development of Eclipse, the dominant open-source development platform. But last year, the Armonk, N.Y., IT giant expanded its reach and role in the open-source world when it bought Gluecode, an open-source rival in the application server market. It was IBM's first acquisition of an open-source company.

Microsoft, for its part, last year signed a partnership with open-source competitor JBoss that was similar in scope to the deal executed with SugarCRM this week. The JBoss alliance, designed to enhance the performance of JBoss' open-source application server on Windows, is expected to bear fruit this year.

Such developments reflect proprietary software vendors’ growing interest and investment in open-source players and shows the rapid rate at which the two software worlds are colliding. Still, IBM's Gluecode acquisition and Microsoft's and Oracle’s increasing activity in the open-source arena raise a disturbing question: Are traditional software companies doing deals to serve customer interests or simply to eliminate or subjugate open-source rivals?

Many proprietary software makers are finding that partnering with or acquiring open-source companies is easier than starting a successful open-source project, said Dave Gynn, application infrastructure practice manager at Optaros, an open-source consulting firm in Cambridge, Mass. Such deals likely will have material benefit for customers, but there are inherent dangers for users and solution providers, he said.

"The good news for enterprises is that, in many cases, a deal could mean that a mature support organization will be available for the project," Gynn said. "But some of these deals will be bad if the software company is simply buying out a potential competitor to get access to the user base or to kill off the project."

The collision of proprietary and open source is "a blessing and a curse," said Christopher Carter, president of CCI, a Milwaukee-based solution provider. "It's a blessing that some great solutions are being noticed for what they are. Yet the curse is that now there is going to be a final decision maker or company making the decision on the direction of the application, instead of the open-source community." And partners need to prepare for the new world. Though some service startups build their business model around the open-source paradigm, the prevalent use of proprietary applications on Linux and the increasing use of open-source applications on traditional platforms requires that partners have skill sets to meet varying customer needs.

"The landscape is changing as a result of this level of IT convergence. It is a reality that IT solution providers need to be ready for,” said Tom Richer, CEO of DevLogics, New York. "Resisting or not adapting to the momentum is futile. Those solution providers that are agile enough to rapidly adapt to this convergence reality will be the ones who come out on top."

Nevertheless, partners need to stay apprised of such deals to assess the competitive impact on their own strategies. For example, the Microsoft-SugarCRM alliance could impact partners servicing the Microsoft-CRM platform, and a potential Oracle acquisition of JBoss would reverberate throughout the JBoss partner ecosystem, solution providers said.

"Consultancies that focus on open source [would] not be too greatly affected, since Oracle's influence [would] probably only increase the reach of open-source software and solutions," said Tom Janofsky, a J2EE architect at Tripod Technologies, a JBoss partner in Cherry Hill, N.J. "But I would be surprised if an acquisition was good news for JBoss partners. A merger [would] probably mean issues for JBoss partners incorporating into Oracle programs, issues of certification and channel. Over the long run, I would think that many smaller JBoss partners would lose out to existing Oracle partners."

Customers and partners must examine the motivations behind each transaction, but the collision of the proprietary and open-source software worlds doesn’t mean that traditional vendors can't strike a balance that meets the needs of users and the channel, industry observers said.

"We find an issue with some of them, but as long as they know the role of the solution and the directions are out there and defined, we all can play nice in the same sandbox," Optaros' Gynn said.

Other solution providers said there’s little to fear, since the success of open-source software has curtailed the power of proprietary software giants.

"If large software vendors like Oracle and Microsoft try to use open-source solutions as a way to create a lock-in to their proprietary solutions, their open-source strategy will fail," said Stormy Peters, director of product management at OpenLogic, Broomfield, Colo. "For example, what if JBoss was optimized only for support of Oracle's database? However, if these large vendors follow the open-source model, which avoids lock-in, then the result would be positive for the open-source community because it would provide an avenue to expand the use of open source in the enterprise."

When asked if the coupling of proprietary software vendors and open-source firms runs counter to the goals of the open-source community, SugarCRM’s Roberts said there’s no collision course to fear. "Isn't commercial open source counter-intuitive?" he said.