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Microsoft highlights early CRM successes

As Microsoft hopscotches the country to drum up CRM business, it's offering up evidence that its newly released software is already making its mark.

BOSTON -- On the latest stop in a cross-country trip designed to drum up business for its inaugural CRM offering,...

Microsoft said the software is rapidly gaining popularity among users.

Executives said that, barely one month after the release of Microsoft CRM 1.0, they are shipping the application to 300 customers, have signed on 850 resellers and have more than 100 independent software vendors working on customized solutions or add-ons.

The road show, which gives prospective buyers an in-depth look at the application's features, is emphasizing the software's close ties to familiar business applications, like Outlook and Microsoft Word, as well as the integration with back-office financial systems.

Microsoft CRM's sales and customer service modules can be accessed via Outlook or a Web browser. While working within Outlook, sales staff can easily designate that e-mail or appointments are related to a particular customer account with just a few clicks. They can also export quote information into Word.

Managers can generate pre-formatted reports for account, invoice, opportunity and lead information. They can also customize forms.

In addition to the close ties with Outlook, Microsoft CRM 1.0 is shipping built-in integration with Microsoft Great Plains financials software using the Microsoft Biz Talk server. Later this year, Microsoft is promising integration with Navision ERP and Solomon financial software.

That integration is what Navision shop Mectrol Corp., a Salem, N.H.-based maker of industrial automation products, is waiting for. Manager of engineering Kris Kras is evaluating CRM software to replace his homegrown applications, and he said he's impressed with Microsoft's offline capabilities and its ease of use. He's currently looking at Microsoft and a hosted solution from the San Francisco-based Salesforce.com.

Microsoft CRM is also available in an application service provider model through a partnership with Bedford, N.H.-based ManagedOps.

Microsoft is making it clear that its CRM software isn't designed for the enterprise, but for small and midmarket companies with 25 to 500 employees. In fact, Microsoft estimates that only 10% to 15% of all businesses that size currently have CRM software.

"I still believe that a spreadsheet is our biggest competitor," said Microsoft CRM product manager Lynn Tsotlias.

Fitness equipment manufacturer Cybex International, in Medway, Mass., currently relies on "WB Mason's legal pads and stuff" as its primary CRM tool, said business systems manager Brian Lyman. As the company looks toward centralizing processes like quote generation and opportunity management, Microsoft CRM is on its software short list, along with PeopleSoft Inc. and the new online edition from ACT, ACT 6.0.

Working in Microsoft's favor is the fact that Cybex just centralized the whole company on Outlook. But Cybex uses PeopleSoft financials and, despite its higher price, may opt for PeopleSoft's CRM software to ease integration.

Microsoft CRM is available in two editions. The Standard Edition includes account management, contact management, mail mergers and customer support features. It sells for $395 per user and $995 for the service or sales servers. The Professional Suite Edition adds quotes, orders and invoice capabilities with integration to back-office financial software, as well as more automation. It costs $1,295 per user, plus $1,990 for the service and sales servers.

"The pricing does seem a little bit high for a truly small company, someplace that may only have a few seats," said Joanie Rufo, CRM research director at Boston-based AMR Research. "ACT has its online version in place now and that only costs several hundred dollars, by comparison."

For a limited time, for every five seats of Microsoft CRM purchased, the sixth is free. Microsoft also said all CRM purchases are eligible for its Total Solutions Financing plan, allowing businesses to finance the licensing costs, partner implementation fees and any add-ons purchased from solution providers.

Later this year, Microsoft plans an international edition supporting German, French, Italian, Dutch, Danish, Spanish and International English.

News writer Matt Hines contributed to this report.

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