SugarCRM has become the second open source software company challenging proprietary client/server ISVs to land a technology partnership with Microsoft.

The start-up and Microsoft have announced plans to improve interoperability between Windows Servers and SugarCRM's hosted customer relationship management (CRM) suite.

SugarCRM additionally plans to release a distribution of its Sugar Suite under Microsoft's Community License, part of Microsoft's Shared Source Initiative. The Shared Source Initiative is Microsoft's program that allows customers to view Windows source code, launched in response to concerns over the security of its software.

The SugarCRM partnership follows last year's announcement Microsoft would integrate its Windows Server system with open source Java middleware from JBoss.

Both deals are a recognition by Microsoft of the potential market opportunities the company can exploit by working with open source and of the dangers it faces by ignoring open source in terms of disatisfied developers and business lost to server rivals.

Some 35 per cent of SugarCRM's customers and more than half of JBoss customers run their open source software on Microsoft's closed-source Windows Server products.

Bill Hiff, director of Microsoft's technology platform strategy, said Microsoft looked on these deals from the perspective of opportunity. Hiff announced the SugarCRM partnership at the Open Source Business Conference (OSBC) in San Francisco.

"When we look at JBoss and SugarCRM... we look at opportunity. We can go and capitalize on that," Hiff said. "The idea of an open source application server might seem orthogonal. But more than 50 per cent of JBoss customers are our customers too. We were interested from an opportunity perspective, not because we like Java," Hiff said.

Microsoft is working with SugarCRM to improve the hosted CRM provider's support for Microsoft's Internet Information Services (IIS), and to provide optimization of Active Directory and Microsoft SQL Server, including SQL Express, SQL Server Workgroup and SQL Server Enterprise. SugarCRM will also use Microsoft's Windows Installer XML (WiX) tools to build its planned products as a Microsoft Software Installer (MSI) package for Windows Server 2003.®

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