Microsoft unwraps latest CRM app

Microsoft CRM's jump from 1.2 to 3.0 was a welcome step, according to some beta users.

Christmas will arrive a little early for businesses awaiting the latest version of Microsoft CRM.

Redmond is making its Dynamics CRM 3.0 product generally available today, following several initial product delays and a jump from version 1.2 to 3.0. The latest version was intended for the first quarter of next year, but Microsoft was able to push the date forward to today.

The long-awaited and much-anticipated release expands the product into a full CRM offering with the addition of marketing resource management, list management and campaign management. It also features closer ties to Outlook, the ubiquitous e-mail application. Its Outlook integration, something many CRM vendors have been  building out for years, is a pillar of Microsoft's efforts to make CRM "work the way you do," according to Brad Wilson, general manager of Microsoft CRM.

"We're really aiming for a native Outlook experience so an average user won't know where CRM starts and Outlook ends," Wilson said in a recent interview. "Simple is the killer app in CRM right now."

The latest version also includes a mobile browser client for handheld applications and PDAs.

For Euphonix Inc., a manufacturer of digital audio mixers based in Palo Alto, Calif., today's release was welcome news. The company selected Microsoft CRM 1.2 in January and has been beta testing 3.0 since the beginning of November. @16106

"3.0 was a major improvement," said Andy Izsak, director of IT. "The reporting engine is amazing. To me the biggest improvement was performance and synchronization. Most of my users are laptop users scattered throughout the world and the synch time went from 5 minutes to 30 seconds."

Microsoft has also improved the development environment to allow easier customization using Web services interfaces. With the simpler customization, users and partners should find it easier to create industry-specific versions. For example, a building management business could easily change the customer field in the applicatio to tenants and buildings fields, Wilson said. Vertical editions will therefore be provided by Microsoft partners.

"For deep verticalization, the partners have the domain expertise. We're good at the core software," Wilson said. "[Partners or users] can create an object and we'll create the metadata. You can save a definition and make an application to sell to property managers."

The arrival of 3.0 was welcome news to some partners as well. While Microsoft now has 5,500 CRM users and has grown its customer base 100% per year, according to Wilson, interest is  expected to ramp up now that the company has issues its first full point upgrade.

"The 3.0 factor is huge for Microsoft CRM," said Frank Lee, president of Workopia, a Microsoft partner based in San Francisco. "We've been using the product internally for the last several weeks. It's night and day between 1.2 and 3.0. We helped a lot of people kicking the tires on 1.2 and 3.0 who say this is much more practical for us."

However, this latest version is expected to fill some functional holes that have, until now, been filled by Microsoft partners, particularly with the marketing functionality, according to Liz Herbert, analyst with Cambridge, Mass.-based Forrester Research Inc.

Microsoft has also rolled out new pricing for the application. A service provider licensing agreement allows customers to pay Microsoft partners only for what they use, Wilson said. However, Microsoft CRM has not been built for a multi-tenant architecture. Hosted software rivals Salesforce.com, RightNow Technologies Inc. and NetSuite Inc. offer a similar approach that allows multiple customers to house their application on the same server.

"A lot of our partners now are on a rent-to-own model [with their customers]," Wilson said. "It's the exact same code whether you're hosted or on-premise. Customers get no benefit from multi-tenancy, for providers it's a way to drive down costs and some customers, like government agencies and banks, don't accept multi-tenancy."

Wilson did acknowledge that there is interest in the model and said Microsoft will have multi-tenancy in its next CRM release, code-named Titan.

Version 3.0 is immediately available in International English, with French, German, Dutch and Russian language versions available in the first quarter of next year. Eight more languages will be added in February, and Chinese and Japanese versions will be available in the second quarter.

Pricing for the on-premise application, including one year of maintenance and support, ranges from $622 to $880 per user and $1,244 to $1,761 per server for the Professional Edition and $440 to $499 per user and $528 to $599 per server for the Small Business edition. Those prices are based on Microsoft's volume licensing programs. The Small Business Edition runs on Microsoft's Small Business Server and is targeted for businesses with 50 to 70 employees. Microsoft charges its partners $24.95 per user per month for the hosted application.

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