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Microsoft gives first glimpse of SaaS CRM

Microsoft unveiled some of the new features in its forthcoming Titan release, which includes a multi-tenant on-demand application.

SAN DIEGO -- Microsoft provided a glimpse of its forthcoming Software as a Service (SaaS) CRM application yesterday at its annual Convergence conference.

The application is now running in Microsoft's data centers on its Live platform. Attendees got a sense of just what the on-demand application will look like during a keynote by Microsoft CEO Steve Ballmer.

Although Microsoft has offered hosted versions of Dynamics CRM through partners, this is the company's first multi-tenant version, allowing users to benefit from economies of scale, with multiple customers running on the same instance.

"What they were missing was the multi-tenancy," said Sheryl Kingstone, analyst with the Boston-based Yankee Group. "It's the full-blown app, which is what you need."

Microsoft CRM Live is the same application as the next CRM release, code-named Titan, giving users the option of moving between deployment models or using both, according to Brad Wilson, general manager of Microsoft CRM. @33600

Users will be able to run the SaaS application from within Outlook or a browser window. Additionally, partners will be able to build vertical editions for specific industries, and customers will have the ability to perform their own customizations, Wilson said.

"Empowering customers to build vertical apps is similar to [Salesforce.com's] AppExchange on-demand model, you need multi-tenancy," Kingstone said. "Right now the problem with partner-hosted is it's single-tenant. It's a noose around the partners' necks from a [total cost of ownership] standpoint."

Users will be able to log into all the Live applications, CRM, Windows and Office with the data streams running through Microsoft's data center, "like Outlook on steroids," Wilson said. And customers can feel confident in the service.

"We're investing in a massive online Web capability," Wilson said. "We're running our own hosting facilities."

Microsoft is still coming late to the game with SaaS CRM. Pure on-demand vendors like Salesforce.com, NetSuite and RightNow have carved out a major slice of the CRM market already, and Oracle and SAP both offer their own hybrid on-demand, on-premise offerings (though SAP's is not truly multi-tenant).

Microsoft has released CRM Live to about 300 select partners through its technology adopters program. It will expand that number in the second quarter of this year. In the third quarter, it will launch a customer showcase program for its on-premise version, and in the fourth quarter it will issue its release to manufacturing and the Web, Wilson said.

The application also offers promise to enterprises seeking to run their own multi-tenant application on premise, Wilson said.

"I've talked to large accounts who say that's what we need," Wilson said. "A lot of enterprises recognize the benefits of a reasonable amount of differentiation."

For example, a large telco that has users selling ads in the yellow pages as well as users selling complex networks might want a single instance, but with different features and tabs. Microsoft has 20 projects internally running multi-tenant, he said.

With Titan, Microsoft is also extending its language support. The current version of Microsoft Dynamics CRM 3.0 supports 22 languages, but each requires a separate server. The new release will support 24 languages on one server.

CRM Live will also offer an online resource center for users seeking information on deploying CRM successfully.

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