Microsoft targets Salesforce.com, Oracle with free CRM promotion

Microsoft has updated its SaaS CRM application and is offering six months free for Salesforce.com and Oracle CRM On Demand customers.

Microsoft today updated its software as a service (SaaS)-based CRM product along with a special offer it hopes will help it steal some customers away from Salesforce.com and Oracle.

Companies currently running Salesforce.com or Oracle CRM On Demand, will receive six free months of the Microsoft CRM Online service when they sign up for an annual contract.

"You sign up for a year and get the first six months free. It's a pretty good deal," said Bill Patterson, group product manager for Microsoft Dynamics CRM. "We've already seen over 30 folks come from Salesforce.com to CRM Online, and each one of them gave us a similar quote. It worked, but it was expensive."

The offer is good through December 31.

Microsoft has consistently sought to compete on price with its SaaS-based CRM offering. When it first rolled out CRM Online, it offered the product at a promotional price of $39 per user per month in its first year. The current list price is $44 per user per month for its Professional Edition, well below its competitors. Salesforce.com charges $65 per user per month for its Professional Edition, and Oracle CRM On Demand is listed at $70.

It’s far from the first time a CRM vendor has offered to give away its product for a limited time to lure away customers from a competitor. Last October, NetSuite made a similar offer to Salesforce.com users, promising to cut their user fees in half and offering 100 hours of professional services to help with data migration and mapping processes across applications in exchange for a one-year commitment to NetSuite.

While such programs may not significantly affect the number of companies that would not have switched otherwise, "they definitely get people to look at the offerings," said Chris Fletcher, analyst with Boston-based AMR Research, "especially with CRM online and Saleforce.com. It's apples to apples."

Microsoft has not been as aggressive with such promotions until now because it has already seen some success luring away competitors’ customers, Patterson said.

"We wouldn't do them if they didn’t work," he said. "I think they work better in the online space. Your propensity to switch is greater, and you have less of a capital investment [in servers and hardware] to make switching an easier proposition."

While CRM vendors have typically competed on features and functionality, the emphasis on price may be good news for CRM buyers.

"I've had a lot of conversations with clients, and they're looking for less functionality and a better customer experience, and that doesn't always equate to functionality and complexity," Fletcher said. "Salesforce.com and Microsoft Dynamics particularly, they're relatively simple approaches to SFA. I wonder if we've reached the point where less is more."

Microsoft CRM enhancements

Microsoft is continuing to add new functionality, anyway. The November 2009 service update includes a faster online set-up process (allowing users to get up and running in five minutes), sales performance workflow enhancements and new dashboards. The release also includes a data import tool, allowing users to pull outside data (such as data from Salesforce.com or Oracle) into the system more easily, Patterson said.

"We've made the application able to port to a mobile device," he added. "It works on any device with html 4.0 compatible browser and includes Nokia and Symbian OS browsers."

Because Microsoft CRM Online and Microsoft Dynamics CRM, its on-premise product, are built on the same code base, the enhancements will extend to the on-premise product as well. The data import tool is now available, Patterson said, and the sales performance dashboards will be made available to Dynamics CRM customers at a later date.

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