Microsoft Prices CRM Online to Undercut Rivals

Playing catch-up in the on-demand customer relationship management market, Microsoft announced the general availability of Microsoft Dynamics CRM Online with aggressive pricing and data storage options that seek to take business away from Salesforce.com.

Dynamics CRM Online is a full suite of on-demand sales, marketing and customer service applications along with business process automation and workflow automation, said Bill Patterson, Microsoft's director of product management for the online CRM package.

To try to entice Salesforce.com customers to switch to Dynamics CRM Online, Microsoft is undercutting Salesforce.com's prices and offering more data storage capacity.

Microsoft is offering its on-demand CRM package in two editions. The Professional Edition offers 5GB of data storage, 100 configurable workflows and 100 custom entities at an introductory price of $39 per user per month through the end of 2008. The regular price after that is $44 per user per month. More details on pricing and options are available at Microsoft's Dynamics CRM Online Web site.

The Professional Plus Edition provides offline data synchronization along with 20GB of data storage, 200 configurable entities and 100 custom entities. This package is priced at $59 per user per month.

Oracle announces the next version of its CRM On Demand software. Click here to read more.

In contrast, Salesforce.com's Professional Edition costs $65 per user per month and provides 1GB of storage.

More than 500 organizations have been using the product for nearly eight months as part of an early release program, Patterson said.

"For some of these businesses this is their first CRM system; for others, they are replacing other CRM investments such as Salesforce.com" and Oracle's Siebel CRM On Demand package, Patterson said. Interest in the Microsoft product isn't limited to small and midsize businesses, he said, but departments and divisions within large enterprises are also showing an interest.

Patterson said the average deployment size is about 15 seats per customer but some of the larger sales in the pipeline are averaging about 27 seats per customer.

Microsoft has also been working with about 300 VARs on the product introduction and about 150 ISVs that are building industry vertical applications that run on top of CRM Online or software that integrates CRM Online with other applications.