Technology giant IBM is replacing CRM vendor Siebel and replacing its CRM systems with cloud-based SaaS provider SugarCRM.

According to reports in the Wall Street Journal, SugarCRM is set to snap up the contract to manage sales, marketing and customer relationships for Big Blue. The contract sees Oracle-owned 67,000 Siebel seats swapped out for the open-source vendor.

At SugarCRM’s conference SugarCon last week, Gary Burnette, vice president of sales transformation at IBM, said that the company liked the open source nature of SugarCRM as well as its look and feel. Perhaps the most important consideration was the ability to run the product on its own cloud alongside its collaboration and analytics technology.

JMP Securities analyst Patrick Walravens told the WSJ that “IBM was the world’s largest deployment of Siebel applications, and we view this replacement as yet another indication of the pressure on Oracle’s application business.”

In the past 12 months Siebel has also lost another tech company account in HP, which moved over to the Salesforce.com platform.

Mark Murphy of analysts Piper Jaffray told the newspaper that the decisions are “momentous”, "because IBM and HP were two of the largest Siebel deployments to our knowledge."

At the time of writing, CloudPro contacted both IBM and Oracle for a response to the story. We will update the story if and when they come back to us.