IBM is planning to replace its Siebel based customer relationship management (CRM) products with software owned by open-source software-as-a-service (SaaS) vendor SugarCRM, according to The Wall Street Journal.

This is the second major contract loss for Siebel, as HP recently revealed that it too would be replacing the platform with products provided by SaaS vendor

However, the changes are unsurprising considering that Siebel was bought by Oracle, a major competitor to both IBM and HP, in 2005 for £3.5 billion.

"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," said Pat Walravens at investment bank JMP Securities.

SugarCRM distributes its software through 400 resellers worldwide and generates revenue by offering services wrapped around the open-source code.

Nick Halsey, chief marketing officer and head of corporate development for SugarCRM declined to confirm or deny whether IBM was replacing its Siebel installations, but did say that the "open-source structure is highly disruptive".

IBM and SugarCRM had not responded to requests for comment at time of publication.