BT is going to distribute and support both SugarCRM, the commercial open source CRM people, and its rival NetSuite, Larry Ellison’s other company. Both companies are competing against salesforce.com, the brainchild of former Ellison lieutenant Marc Benioff, with on-demand CRM applications.

No terms were disclosed.

BT is supposed to go chase SMBs and divisions of large companies, targeting its roughly1.6 million business customers in the UK and EMEA with NetSuite’s stuff.

The SugarCRM deal is limited to the UK and BT’s 1.2 million business customers there and includes both its on-site stuff and its “cloudware.”

Part of what makes this alliance possible for NetSuite is its introduction of OneWorld, a new on-demand product that’s supposed to let multinationals and multi-subsidiary firms manage their business in a single application.

There are around four million SMBs in the UK many of which are supposed to need multinational CRM, ERP and e-commerce and most of them buy separate packages.

NetSuite is offering a cheaper proposition that promises integrated data and an end to application fragmentation that makes it hard for the front office to talk to the back office.

BT is supposed to sell OneWorld as well as NetSuite’s other wares.