The VAR Guy

Intel has opened its wallet again for open source, this time pumping money into Centric CRM. Intel’s open source interests reveal five key trends that should worry Microsoft and other closed-source software providers.

Intel Capital didn’t disclose how big a check it’s writing for Centric CRM. But the deal solidifies Centric CRM as a legitimate alternative to SugarCRM — widely considered the leading open source CRM software provider. The Intel-Centric CRM deal also comes a few months after Centric CRM began gaining momentum within Corporate America.

Of course, this isn’t the first time Intel has invested in an open source company. The chip giant’s venture capital team has also invested in MySQL and JBoss (now owned by Red Hat), among others.

So, how does Intel’s growing open source focus impact Microsoft? Glad you asked.

1. More Windows Server competition: Already, we’ve seen the Intel-Red Hat alliance make Red Hat Linux a wildly popular operating system for Intel server grids. Red Hat’s momentum, The VAR Guy believes, prompted Microsoft to align with Novell.

2. More server application competition: Centric CRM will, undoubtedly, increasingly compete with Microsoft Dynamics CRM, Oracle/Siebel, Salesforce.com and other CRM software providers.

3. More desktop competition: Intel is one of the loudest promoters of Ubuntu Linux — the fast-growing open source desktop operating system. In fact, Intel and Dell among the top sponsors of the upcoming UbuntuLIVE conference in July.

4. More mobile device competition: Intel also is working with Ubuntu on a mobile/embedded version of Linux for Internet devices and smart phones. Preliminary code should ship this fall, with Intel-based mobile devices running Ubuntu arriving in early 2008.

5. Less Intimidation By Microsoft: In the 1990s, Microsoft’s overwhelming power intimidated PC suppliers and hardware companies. These days, decisions by Dell and Intel to aggressively support open source gives smaller hardware companies the confidence they need to break away from Microsoft whenever appropriate.

Of course, The VAR Guy is only providing one side of the story. Ironically, open source could also help Microsoft. Imagine if Centric CRM, SugarCRM, MySQL and other open source applications ran best on Windows Server rather than Linux. Microsoft’s Windows Server team is working overtime to ensure that scenario remains plausible.

Still, one thing is clear: Microsoft remains the world’s largest software company. But competition is thriving in the software market.