Microsoft vs. Salesforce: Let the Battle Begin

Surprise, surprise! is not exactly happy about Microsoft's upcoming new on-demand Dynamics Live CRM service, which was showcased at the company's annual Worldwide Partner Conference in Denver on July 10. is also less than pleased about the fact that Microsoft has undercut its pricing fairly significantly.

The Dynamics Live CRM service, which will be operated and managed within Microsoft's data centers and made available to U.S. customers later this quarter, is based on the upcoming release of Microsoft Dynamics CRM, code-named Titan, a multitenant application platform that supports deployments in on-premise and partner-hosted environments as well as via the new Microsoft Dynamics Live CRM service.

The first two service offerings will be Dynamics Live CRM Professional and Enterprise. The Professional service offers a full-suite CRM through Microsoft Outlook and browser clients, customizable workflow powered by Windows Workflow Foundation, and rich configuration and extensibility capabilities.

The service will cost $44 a user per month, but will be offered at a promotional price of $39 a user per month during 2008.

The Enterprise service has all the capabilities of the Professional product as well as offline data synchronization, at a cost of $59 a user per month. It will be available in the first half of 2008.

Compare that with's prices: its Professional and Enterprise CRM editions cost $65 and $125 a user a month, respectively, while its Group Edition comes in at $10 a user per month.

A spokesperson for told me the Microsoft on-demand CRM news was nothing more than a re-announcement of the same product, while CEO Marc Benioff called it an "inferior product."

But the marketing and public relations battle between the two foes is now on in earnest. An e-mail sent out by Bruce Francis, the vice president of corporate strategy at this week, makes clear just where the company believes it has the advantage over Microsoft, a newcomer to this space.

"The industry is moving toward software as a service with a quickening pace. Today's businesses want a wide choice of integrated on-demand applications to work with their CRM. They want to be able to create any application on demand. That's why we introduced the AppExchange -- our marketplace of more than 600 on-demand applications built by more than 300 partners -- and Apex, the world's first ever on-demand programming language," he wrote in the e-mail.

Businesses also want on-demand applications to combined platforms for CRM and advertising, which is why the company had entered into a Global Strategic Alliance with Google and Salesforce Group Edition featuring Google AdWords, Francis said.

Then he got to the heart of the matter: "They want real innovation and proven success validated by leading third parties. That's why Gartner called us a leader in its annual 'Magic Quadrant.' And of course businesses want it all to run on a trusted infrastructure with transparent operations. That's what has developed in over eight years of working directly with customers and helping them run their businesses," Francis said.

Let the battle begin!