Microsoft Dynamics CRM Review
- Founded in 1975 and headquartered in Redmond, WA, Microsoft (NASDAQ: MSFT) is the largest software company in the world.
- Microsoft entered the business applications market in December 2000 with the acquisition of Great Plains Software in a $1.1B stock purchase. This acquisition followed the Great Plains acquisitions of Solomon, RealWorld and FRx. The Great Plains acquisition was then followed by Microsoft's acquisitions of Navision Software in July 2002 for $1.3B.
- At the time of the Great Plains acquisition, Great Plains had both an OEM relationship to resell Siebel and was also working on a new CRM product solution. The in-house CRM product solution eventually picked up steam after the Microsoft acquisition and later became MS CRM.
CRM Software Information:
- CRM target market: Small business
- Delivery methods: On-premise and hosted
- Pricing methods: procurement and subscription pricing
- Software pricing: Enterprise Edition of CRM Live is priced at $59 per user per month while the Professional Edition lists for $44 per user per month (and is available at a promotional price of $39 per user per month until 2008). This pricing is direct from Microsoft (not necessarily the same price pricing you would get from a Microsoft partner) in which case the solution would be hosted from Microsoft's data center in Virginia.
- Vertical markets and industries: N/A
CRM Software Products and Modules:
- Sales force automation
- Marketing Automation
- Customer Support
Microsoft CRM Strengths:
- Knowledgeable indirect sales and distribution partner channel
- Committing resources to advance SaaS solution
- Corporate strength of Microsoft
Microsoft CRM Weaknesses:
- Many regard user interface and navigation as difficult and unintuitive
- SaaS solution was late to market and does not yet compete well with SaaS pure plays
- Piece meal CRM solution – no ERP, accounting, HR or other SaaS offering
- Limited to small business organizations
Microsoft CRM Customers:
- While Microsoft has several large on-premise customer accounts, no large software as a service hosting accounts have been identified.
Microsoft CRM Competitors:
- Key on-premise CRM competitors include Sage SalesLogix and Maximizer. Microsoft occasionally competes with Oracle's Siebel or Onyx in larger on-premise deals.
- Key SaaS CRM competitors include Salesforce.com, Oracle OnDemand and Aplicor.
Microsoft Dynamics CRM Software Review
Microsoft appears to be in a precarious crossroads with regard to software as a service solutions. After first downplaying the SaaS market, Microsoft now claims it will embrace the market and shows some signs of that by affixing the label "Live" to several existing product names. With regard to customer relationship management software, and as with most things Microsoft, the fourth version got it right. This most current version of Microsoft CRM, still commonly referred to as Titan, is Microsoft's first real entry into the CRM software-as-a-service (SaaS) industry. While still limited to small businesses, Dynamics CRM Live is the first MS CRM version to support multi-tenant hosting.
Microsoft has chosen to hedge its bet and distribute CRM software under three delivery models - as traditional shrink wrap product paid for up front and installed on premise, hosted by Microsoft partners or hosted by directly by Microsoft (for North American organizations). The SaaS option is referred to as Dynamics CRM Live. To avoid alienating partners, Microsoft has assured hosting partners that Dynamics CRM Live will focus on "vanilla" CRM implementations that will appeal to mostly small customers. Saleforce.com Senior Vice President Bobby Napiltonia was quick to publicly point out the acknowledged customer confusion among three delivery models, "The first thing I do [as a potential customer] is I start scratching my head." Napiltonia also pointed out "It's really hard to do perpetual licensing and renewal and mix that with software as a service." According to Brad Wilson, Microsoft Dynamics CRM General Manager, Microsoft is definitely positioning Dynamics CRM Live as a small business play (see Redmond Channel Partner magazine, March 2007). Wilson also says "multi-tenancy gives you good economies of scale, especially when you're going to provide Software as a Service for small businesses". While dipping their toes in the water, the software giant's continued push for advanced purchase, on-premise software will continue the company's higher margins. There's little secret that Microsoft will most likely maximize their revenues from on-premise CRM software and promote SaaS CRM as a
source of incremental revenues.
Company & Product SaaS Evolution
Microsoft has three primary challenges to sort through. First is its indirect selling and distribution arm. All business software solutions are distributed through Microsoft's business partner channel and it's no secret that the channel dramatically prefers to sell on-premise solutions over SaaS solutions (due to up front payment and significantly higher margins). Industry insiders show concern that the CRM solution pushed to any given customer may be more influenced by the particular Microsoft partner selling organization's business model (and their differing margin programs) than by customer need. Second, Microsoft needs to ensure that its partners who choose to offer hosting services are credible. We have heard of instances where partners are implementing hosting services with everything from servers in a closet to colo data centers without redundancy and with minimal regard for information security. If one or two Microsoft hosting partners make headlines for their downtime or exposing client data on the Internet (due to weak security), Microsoft's SaaS solution will be harmed and the SaaS industry will be temporarily questioned. Third, Microsoft's heritage is clearly desktop applications and the company is showing some indication that it may not offer true browser-based (zero footprint) SaaS solutions, but instead opt to require client side downloads in a so-called 'Smart Client' solution. We certainly hope that Microsoft ventures outside of its comfort zone and declines this fat client step backwards. Requiring client-side downloads and remote code management defeats very significant SaaS benefits such as accelerated implementation, any device access, centralized software management, simplified security and reduced user trouble-shooting support.
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