SugarCRM Inc. plans to ship the beta version of Sugar 5.0 next month, an upgrade to its open-source customer relationship management software that should make it easier for companies to extend the product with third-party applications, company executives said Wednesday.

The release comes at a time of rapid growth for SugarCRM, fueled in part by the increased use of its software on servers running Microsoft Corp.'s Windows Server OS and SQL Server database.

SugarCRM's last big upgrade, Sugar 4.5, was released in August last year and aimed to round out the suite's core CRM functionality, as well as adding better compatibility with Microsoft's server software.

This year's release, version 5.0, will be focused on improving the product's underlying software architecture, said John Roberts, SugarCRM's chairman, CEO and cofounder. The aim is to make the software more extensible, he said, meaning it should be easier for developers to build their own applications and link them to Sugar 5.0.

The goal is to ship the final product in July, with a beta due out a few months before that, probably in April. Roberts said. The company expects to offer its software under both the Mozilla Public License and the GNU General Public License Version 3, which is expected to be finalized soon.

Making Sugar 5.0 more extensible is critical, said one industry analyst, because customers increasingly want the ability to extend their CRM applications to fit with their particular business processes.

"Salesforce.com has really set the bar, and that bar includes the ability to customize native applications and to incorporate applications written by other parties," said Denis Pombriant, principle at Beagle Research Group LLC.

Making Sugar 5.0 more extensible may be a first step by the company in building its own applications community, much as Salesforce.com has done with its AppExchange, he said. Other competitors for Sugar include NetSuite Inc., SAP AG and Oracle Corp.

Rob Bois, a research director at AMR Research, said SugarCRM is trying to appeal more to large enterprises, "where integration and interoperability becomes fairly critical."

SugarCRM has grown quickly since it was founded three years ago. It says it has 1,200 paying customers, double the number it had 10 months ago. By the end of the year it expects to more than double the number again, to over 3,000 customers, Roberts said.

The IDG News Service is a Network World affiliate.