ATLANTA -- Microsoft executives yesterday described a broad outline of their CRM development strategy going forward and revealed more specific plans for the next release of Dynamics CRM on-premise, which will include quicker release cycles and an online marketplace of complementary applications, similar to Salesforce.com's AppExchange.
Speaking at a session at the Convergence conference being held here this week, Craig Unger, general manager of Microsoft Dynamics CRM R&D, and Mike Ehrenberg, distinguished engineer and the senior architect for the Dynamics product line, promised that future CRM development will focus on four key areas: the cloud, "the consumerization of IT," social CRM, and CRM analytics.
Meanwhile, the next release of Dynamics CRM on-premise, referred to as "CRM 5" internally at Microsoft, will be released around the end of the year.
With CRM 5, Microsoft intends to speed up its release cycle to a faster pace that will more closely match the releases of its Software as a Service (SaaS) application CRM Online.
"We're going to try to bring this together in terms of what people expect in the online service," Unger said. "We'll have one balanced code base moving forward."
Microsoft Dynamics CRM Online is now in its fifth release and is updated roughly once every six months. CRM accelerators, like the portal accelerators for Partner Relationship Management, Event Management and eService issued in the latest release, are also released as separate extensions to Microsoft CRM.
The tighter release schedule also means more opportunities for independent software vendors (ISVs), Unger said. Microsoft Dynamics CRM Online did not provide the same access to write custom code in a sandbox because Microsoft did not want outside code in its own application, but with Azure, ISVs can execute their own code, he said.
"With CRM 5 we're going to take away that difference so it will be full in parity and extended to ISVs and allow the online application to penetrate further into enterprises," Unger said.
Microsoft will also roll out an online marketplace of plug-in applications with CRM 5, based on the existing Marketplace. It will now be extended to Dynamics CRM, and Microsoft will certify applications as well as allow community ratings of applications.
"This is going to be a big new area for us," Unger said. "The idea here is we want to create an ecosystem that allows partners to take the work they're doing on CRM -- such as with content, or a customized or role based dashboard. There's a pretty dynamic and active development community on CRM today. This makes it easier to participate."
According to Ehrenberg, there will be new support for metadata changes, allowing ISVs to package and distribute those changes as a package.
While there was internal discussion of breaking out xRM, Microsoft's underlying framework for its CRM product that customers can adapt to their own unique relationship requirements, it will remain part of the Dynamics CRM offering.
Microsoft CRM's future
As for the future of Microsoft CRM, the cloud remains an area of emphasis. In a keynote address on Sunday, Steven Elop, president of the Dynamics Business Unit, said 90% of engineers' R&D efforts will be devoted to the cloud within two years.
Among Microsoft's cloud efforts will be giving users the ability to bring outside data into the CRM application.
"If you look at how our team has built a CRM system over the last few years, it's more like building a database application," Unger said. "It doesn't look much different from database form in Access that's built to look at data inside of your organization. With cloud computing, the challenge for people using our software is to really keep track of what's going on in the cloud and mix that with external data and drive analysis and decision making."
The "consumerization of IT," an industry-wide reference to users expecting the same form and functionality from their enterprise applications that they receive from consumer-based applications, will also be a focus.
Microsoft's approach to simplifying its user interface has -- understandably -- been to focus on its Outlook email application. Microsoft will "revamp the Outlook experience" in the next release, Unger said, but the company will also explore search from within the application and mobile interfaces.
The usability problem in CRM has led to a "history of shelfware" in the market, he said -- one Microsoft has not been immune to. Microsoft is still working to remove an installation of Siebel at the company.
Social CRM -- a buzzword in the market for the last year as companies grapple with how to reach, service and market to customers involved in social networks like Twitter, Facebook and LinkedIn -- will be an area of focus for Microsoft as well. It has already created a Twitter integration accelerator.
The focus on social CRM is widespread among CRM vendors. RightNow, NetSuite and Salesforce.com have all released social networking features in the past year. However, some organizations are in no rush to dive into social CRM.
"We have so much pent-up demand for IT, we can't deal with that fast enough," said John Lomnicki Jr., enterprise architect for the Minneapolis-based Board of Pensions for the Evangelical Lutheran Church in America. "We don't have time to see what people are saying about us online."
With a growing demand for insight from CRM systems, CRM analytics from Microsoft will shift from simple dashboards to a deeper understanding of customer data.
"What we want to move to is predictive analytics," Unger said. "It's not just eye candy."
While Microsoft offered some indication of the forthcoming features in CRM 5, the trends affecting the industry and Microsoft's plans remained very high level during the session.
The Board of Pensions for the Evangelical Lutheran Church in America runs Dynamics CRM on premise, and the quicker release cycle was not a big deal for the organization, Lomnicki said. To test any new features, he plans to download the online trial version to assess them.
"Why start up a whole set of servers on our side for it?" he asked.
Nor will the organization embrace Microsoft's move to the cloud any time soon.
"We have SEC and HIPAA data we need locked behind firewalls, behind firewalls, behind firewalls," Lomnicki said. "We don't want to be the first in the cloud with HIPAA data."