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Microsoft targets Salesforce.com, Oracle CRM with promotional price

Microsoft continued to put pricing pressure on its competitors in the SaaS CRM market today as it revealed plans to offer Dynamics CRM Online at a $34 per user per month price.

Once again Microsoft is taking aim at CRM competitors like Salesforce.com and Oracle CRM OnDemand with its own Software as a Service (SaaS) product, and once again it's using pricing as a lever.

At its Convergence 2010 Europe event, Kirill Tatarinov, corporate vice president, detailed the promotional pricing for its forthcoming Microsoft Dynamics CRM Online product -- roughly half the cost of its competitors.

Under the global launch promotion, Microsoft Dynamics CRM Online will be offered at $34 (or €31) per user, per month for the first 12 months of service. The promotional pricing is available until June 30, 2011. After that the list price returns to its standard rate of $44 per user, per month.

"CRM Online is our full CRM product with a great user experience," Brad Wilson, general manager of Microsoft CRM, said in an interview earlier this week. "We think we have a great value prop where we give you full CRM suite capabilities with a much lower TCO than competing vendors like Oracle or Salesforce.com."

Salesforce.com's per user per month pricing is listed as $125 for its Enterprise Edition and $65 for the Professional Edition. Oracle CRM OnDemand pricing starts at $75 per user, per month.

Microsoft Dynamics CRM release 2011 was released in beta last month to both SaaS and on-premise-based deployments and currently has "thousands of beta customers," according to Wilson.

This is not the first time Microsoft has targeted its competitors with a pricing promotion. When it first rolled out CRM Online in North America, it did so with a $39 per user per month promotion. And a year ago it offered six months free to customers who switched from Salesforce.com or Oracle.

"On-demand CRM is a bit pricey today in general," Wilson said. "You look at the monthly cost times 12 months, times the number of users and it's significant. As we scale out our global data centers we'd like to do for [the?] on-demand space what we've done for the on-premise space."

That is, make it cheaper. Whether this promotion makes a difference in purchasing patterns remains to be seen, but so far, Microsoft has made some significant inroads into the market Microsoft also announced it will release its Dynamics AX ERP software for retail to 22 new markets on Feb. 1, 2011. They are Austria, Belgium, Brazil, China, the Czech Republic, Estonia, Hungary, Iceland, India, Israel, Italy, Japan, Latvia, Lithuania, Poland, Russia, Saudi Arabia, Spain, Sweden, Switzerland, Thailand and Turkey.

Microsoft also made generally available a connector for companies running Two-Tier ERP strategies to connect Dynamics AX at subsidiaries, divisions or branches to the SAP Business Suite.

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