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Was Microsoft CRM 3.0 worth the wait?

Initial reactions to Microsoft's latest CRM release are positive, but the company may have lost some of its early momentum, thanks to launch delays.

With the preview of its latest CRM release last week, Microsoft not only jumped from version 1.2 to version 3.0,...

it jumped back into the minds of CRM buyers.

"We went for quite a while having a hard time generating any interest [in Microsoft CRM]," said Ben Holtz, president of Green Beacon Solutions LLC, a reseller in Watertown, Mass. "We're hoping the new version will reinvigorate the marketplace."

The new release of Microsoft CRM was delayed several times, leaving some resellers like Green Beacon in a tough position. Microsoft made a big splash when it dove into the CRM market with version 1.0 in early 2003, but one year later it hadn't made the impact many predicted. In fact, the delays caused a fair amount of disruption for any partner that had pushed the product at an early stage.

"I can say we made a conscious decision to not invest as much as we would have in our own sales and marketing activities because of delays in [Microsoft's] product," Holtz said. "We all love the 1x product. It's a great product and we've all been eager for more. I made a mistake in 2002 of investing a lot of time, energy and real money in promoting Microsoft CRM prior to its launch. The initial delays were hurtful to me and my business."

This was not the case with all of Microsoft's partners. Protech Associates Inc., a Microsoft Gold certified partner in Laurel, Md., felt it could count on Redmond to deliver, said Brian Bruffey, president and CEO.

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"It's absolutely the reason we adopted Microsoft CRM," he said. "There is a road map, it's backed, and we can extend that to our customers. We'd rather have it right than rush to market."

That has been the message from Microsoft all along -- that it takes time to get the product right and provide customers and partners with exactly what they want. In fact, Brad Wilson, general manager of Microsoft CRM, said earlier this year that the most recent delay was at the request of the company's partners.

What's encouraging for Microsoft and the customers and partners that have been eagerly anticipating it, is that 3.0 appears worth the wait.

"Especially the campaign management and marketing automation features," said Bruffey. "We see a great need there, especially with not-for-profit companies. We developed our own list management capability. New 3.0 will replace that and help lower the cost of ownership."

In fact, the new functionality is going to fill holes that, until recently, had been filled by partners, said Liz Herbert, analyst with Cambridge, Mass.-based Forrester Research Inc.

"It will vary by the partner, but certainly [resellers will] have to get more innovative with the enhancements they're building," she said.

And while some may be frustrated by the delays, they are still willing to wait. In a recent Forrester survey of small and midsized businesses (SMBs), Microsoft topped the list of those who plan to purchase sales force automation tools in 2005, Herbert said.

Version 3.0, previewed last week at Microsoft's TechEd Europe conference and its Worldwide Partner Conference, will be available to customers on earlier versions in the fourth quarter of 2005 and generally available in the first quarter of 2006. It promises easier configurability and features improved integration with Microsoft's Office products, mobile functionality, marketing automation and a service scheduling module.

"They talk about more depth and breadth with customizations and if they execute, that's fantastic, especially for us in the upper end of the midmarket where we do a lot of that," Holtz said. "Obviously, the marketing automation tools are going to make the product more competitive in their marketplace, which we consider SalesLogix and Salesforce.com. I want a more compelling argument to go after Salesforce.com."

Microsoft CRM is already at the top of many companies' short lists and the new functionality should help them compete, Herbert said. One Forrester client purchased the 1.7 product to get first dibs on the new release and is holding off on deploying it until 3.0.

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