Microsoft Seeks Broad Market for CRM 3.0

Microsoft is counting on close integration with the Outlook and Office user interfaces to encourage small and midsize businesses to buy its newly released Dynamics CRM 3.0 package.

Microsoft launched its bid to make customer relationship management more pervasive in companies large and small with the release Tuesday of its Dynamics CRM 3.0 suite.

The new version, which Microsoft has been working on for more than three years, includes close integration with the Outlook and Office application interfaces.

It is also designed to allow the CRM applications to be rapidly integrated with the customers data and business needs, said Kevin Faulkner, senior director in charge of product marketing for Dynamics CRM 3.0.

The package also provides easy ad-hoc query and analysis features, a quick marketing campaign design wizard, rapid Excel spreadsheet integration as well as service scheduling and dispatch among its many new features.

Microsoft is marketing and pricing the product to appeal to SMBs (small and midsize businesses), but it isnt going to stop there, Faulkner said.

"We really want to take CRM out and make it very pervasive, and we think we are the right company to do that," Faulkner said.

"But we are seeing strong demand on the enterprise side as well," he said. The company is making "multi-thousand-seat deals" for CRM 3.0 at the same time it is marketing to the SMB segment, he said.

/zimages/1/28571.gifClick here to read more about how Microsoft has integrated CRM 3.0 with Outlook and Office.

The English version of the product was released Tuesday. Microsoft also wants to rapidly roll out the Dynamics CRM globally by releasing Dutch, French, German and Russian version of the product by Jan. 17. Microsoft plans to release versions in 17 additional European, Middle Eastern and Asian languages over the next few months.

Microsoft is making Dynamics CRM 3.0 available in a Professional Edition and a Small Business Edition.

The Professional Edition is priced between $622 and $880 per user and between $1,244 and $1,761 per server, depending on the feature set selected.

Small Business Edition prices range from $440 to $499 per user and between $528 and $599 per user.

A key inducement to implanting CRM 3.0 is that Microsoft has extended the package beyond sales and service automation to include marketing automation, said Liz Herbert, an analyst with Forrester Research Inc. in Boston.

This factor, along with Microsoft Outlook integration and improved integration and customization features "will allow it to compete better in the large enterprise segment," Herbert said.

CRM 3.0 is still "at its core an SMB product, but I would expect that with large enterprise it would start as a divisional and departmental product and then move deeper into the enterprise," she said.

Microsoft is also going to allow partners to offer CRM 3.0 as a hosted, on-demand application service. But Herbert noted that this isnt a full-scale, multi-tenant software as a service. The partners will be offering individual installations that they host on behalf of each customer, she said.

So while it doesnt present a strong direct challenge to companies that are providing true, multi-tenant on demand CRM applications, it addresses the needs of customers who dont want to deal with managing the IT resources required to host the application on their own sites, she said.

Microsoft customers said the close integration with Outlook and Office is a critical factor in their decision to work with CRM 3.0.

Next Page: Making CRM pervasive.

John Pallatto

John Pallatto

John Pallatto has been editor in chief of QuinStreet Inc.'s since October 2012. He has more than 40 years of experience as a professional journalist working at a daily newspaper and...