Entellium's move could place it squarely in the crosshairs of two competitors: Salesforce.com Inc., which is in the process of evolving its hosted CRM offering into an on-demand application platform, and SugarCRM Inc., which earlier this year brought the first open-source commercial CRM offering to market. But Entellium is not converting its core product to an open-source model, says CEO Paul Johnston. Instead, it's looking to complement its Web-services strategy of delivering hosted CRM as a modular suite of tools.
Entellium's open-source strategy should pay off for customers in two ways, Johnston says. Registered developers who use the source code to build CRM apps customized for their own businesses will pay discounted subscription fees since they're not using the full, hosted software developed by Entellium. And for businesses, it will mean more availability of industry-specific CRM tools. Entellium's goal is to make its technology relevant to as many industries as possible, says Johnston. "There are many opportunities to bring unique value propositions to certain industries," he says. "The way car dealers sell is very different from the way a pharmaceutical company sells."
In a research note, Martin Schneider, an analyst with The 451 Group, wrote that Entellium's open-source effort should speed development of industry specific CRM functionality and create an incremental revenue stream for Entellium and its partners. "What will be interesting to see is just how permissive Entellium will be with its code," wrote Schneider," and if the company tries to strictly police its development community."