Microsoft to Face Uphill CRM Battle

With the announcement of its CRM suite last week, Microsoft Corp. faces familiar hurdles-skeptical users, strong competition and a tight development timetable.

With the announcement of its CRM suite last week, Microsoft Corp. faces familiar hurdles—skeptical users, strong competition and a tight development timetable.

Seeing the daunting task the Redmond, Wash., company faces, potential customers and competitors said they dont expect Microsoft to meet what many believe is the unrealistic goal of delivering the customer relationship management offering in the fourth quarter.

"Theyre just getting the word out now to try to freeze the market," said Tom Racca, vice president of engineering and operations at iQ NetSolutions Inc., a user of Microsoft Great Plains financials and manufacturing applications. "They dont have a product yet, so theyre trying to get companies to hold off on their purchasing decisions until they see whats available."

Microsoft CRM, the first business applications to be built on .Net Framework, will be accessible from Web and Outlook clients. It is targeted at small-to-midsize businesses with basic sales and customer service automation needs.

Development will be spearheaded by the team that built Microsofts bCentral Customer Manager and Great Plains field service applications, officials said.

Microsoft CRM will be available as a stand-alone product or integrated with Microsoft Great Plains Dynamics, Solomon and eEnterprise back-office applications, officials said.

iQ NetSolutions, a 30-employee company in Westboro, Mass., is the kind of business Microsoft will be attempting to reach with its CRM package. iQ NetSolutions has yet to deploy a CRM system, but Racca said he wants to know more about the new offering.

"We still manage everything individually, but as we grow, well need to utilize a CRM application," said Racca. "If thats the kind of company theyre targeting, then wed be interested."

Potential competitors are not worried. "Well have a year to compete against a phantom product," said Interact Commerce Corp. CEO Pat Sullivan, in Scottsdale, Ariz. "Microsoft is going to bring a lot of awareness to the [CRM] space. Theyll help to grow the space."

Microsoft also will have time to clarify its relationship with CRM leader Siebel Systems Inc. Microsoft resells Siebel Mid-Market Edition as an option to its Great Plains suites, but that deal is scheduled to expire at years end. Microsoft and Siebel officials said no decision has been made on renewing the agreement.

iQ NetSolutions Racca, for one, is not looking to move to Siebel. "Siebel is more than what we would need to spend," he said.

A Feb. 25 article misidentified Barton Goldenberg, president of ISM Inc., a Bethesda, Md., CRM consulting and research company.