MOUNTAIN VIEW, Calif. - Microsoft Corp. offered a first glimpse at the workings, packaging and pricing of its new mid market customer relationship management (CRM) software, the first business application built on Microsoft's .NET architecture.
David Thatcher, Microsoft Business Solutions (MBS) CRM general manager, made these announcements and explained the company's CRM strategy during Microsoft's monthly Silicon Valley Speaker Series event last week.
Thatcher announced an "aggressive, straightforward, and flexible" licensing model for the CRM line. There are three product offerings -- Sales, Service and Suite -- on each of two levels of functionality, Standard and Professional. Prices range from $395 per user, plus $995 for the server, for the Standard Sales level to $1,395 per user and $1,990 for the server for the Professional Suite. The Professional products offer more workflow, back-office integration and contract management capabilities than the Standard line does.
Thatcher stressed that this pricing structure and the capabilities of Microsoft's CRM offering are designed specifically for mid-market businesses with 25 to 500 employees and 15 to 150 CRM seats.
"We're not targeting the enterprise," Thatcher said. Instead, Microsoft is delivering a single, integrated solution for the mid market, whose need for CRM functionality may not be met by enterprise and low-end point solutions.
Next month Microsoft will make available beta versions and said it will release the software in the fourth quarter.
Why the mid market?
Microsoft believes that the mid market is the sweet spot for CRM, in terms of customers' needs and a lack of competition. Thatcher cited San Jose, Calif.-based Gartner Dataquest's estimates that only about 20% of midsize businesses currently use CRM solutions. "These markets are at the early stages of adoption with large opportunities for CRM vendors that approach the market with the right products and messages," said Gartner Dataquest research director Joe Outlaw.
The enterprise market has been well served by such CRM vendors as Siebel, Thatcher said. However, Microsoft faces little competition from other vendors in the mid market, Thatcher said. Instead of fighting against competitors, he said, Microsoft faces the challenge of convincing businesses that CRM is finally affordable. The company's aggressive pricing should make a convincing argument, he added.
Microsoft will take its CRM suite to market via its reseller channel. "This product enables us to address a market space we have not been able to approach to date," said Terry Petrzelka, CEO of Belmont, Calif.-based Tectura Corp., a leading Microsoft reseller and ISV partner who spoke at the event.
The price for Microsoft CRM is right and so are its return-on-investment and ease of use stories, said Petrzelka. Microsoft CRM "increases the return on investment of Microsoft systems in place already," he added. The new products' interfaces are like the ones customers are already using in Microsoft Office, relieving customers of the need to pay for extensive user training.
Just like Office
At the event, Thatcher displayed those Office-like interfaces while putting Microsoft CRM through its paces. The Microsoft CRM products use either Microsoft Outlook- or browser-based clients and Microsoft SQL Server database.
Users will be able to customize the CRM products' capabilities themselves, using a management tool with a standard Microsoft interface. "We saw the need to provide a way for the system to be easily customized, even if (a company) didn't have sophisticated IT people in-house," said Thatcher.
The Microsoft CRM software's .NET foundation enables the easy connection of systems and extends CRM capabilities by facilitating the use of external Web services such as analytics and marketing automation services, Thatcher said.
The new products are tightly integrated to Microsoft's business applications, such as Office and Exchange. The Sales and Service modules can be used as standalone solutions or used together as a suite. They can also be integrated with MBS Great Plains business applications, such as Dynamics, Solomon and eEnterprise.
Microsoft also has plans to enable integration with the Attain and Axapta mid-market business application from Navision A/S, a Danish company acquired by Microsoft on July 11.
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