Microsoft, SAP and Oracle are getting serious about software-as-a-service (SaaS); an area pioneered by niche players like Salesforce.com and NetSuite. With the heavyweights now in tow, the market is gathering steam. Microsoft recently announced a third deployment option to be offered when its Dynamics CRM 4.0 solution, code-named Titan, ships in Q2. It will be the first Microsoft CRM release based on multitenant architecture, allowing a SAAS vendor to host multiple customers' applications on a single server instead of dedicating servers to individual customers. ARN's Jennifer O'Brien sat down with Microsoft Business Solutions' CRM top dog, Brad Wilson, to discuss the product roadmap and what it means for the software giant's channel.
What are the new Titan deployment options?
It will be a single code base that supports three deployment options. The first is on-premise, where we give the bits to the customer to deploy in their own IT environment. The second is partners hosting software for customers under a SaaS model, while the third model is Microsoft Dynamics Live CRM; a new service hosted by us on our own Windows Live data centres. It will initially be available in North America in the summertime, and we will then expand it internationally. We don't have any specifics about Australian availability yet. The first two options (on-premise and partner hosted) are available today as a pre-release.
Is the third iteration of the Live model following in the footsteps of Windows Live and Office Live?
One thing that's a bit different about the new Live CRM offering is that it provides what Bill Gates calls 'servers, service, symmetry'. Whether you deploy it on-premise, as a server-based product or get it as an on-demand service, it offers the exact same experience.
Which deployment model is the most popular?
Today, on-premise is the predominant delivery mechanism. In the CRM market overall, and within our own customer base, SaaS will be the fastest growing, but it won't be the majority of our business in the next few years. It will be an option for our partners and for customers.
What's Microsoft's vision of SaaS?
SaaS is simply a way of delivering business application functionality as an Internet service. It's really just a question of where the server lives and who takes care of it. Smaller businesses that are very IT constrained that don't want a server in their environment, but want application functionality, will benefit in a big way.
Are small businesses the main target market?
We think SaaS is relevant to all segments - from small business to mid-market and enterprise. Our initial focus will be around small to mid-sized companies because they are the ones that usually have less IT capabilities, but still need robust business application functionality.
Are there any hot vertical markets?
Microsoft CRM is sold in over 80 countries and in 22 languages, so getting the right partner ecosystem is important for us. Our top four verticals are financial services, manufacturing, public sector and professional services like engineering, construction management and legal services.
Where are the partner opportunities?
CRM isn't about putting in CDs and installing the software bits: a lot of the valuable work is our partners helping customers define how they do sales or marketing processes or customer service. A customer could start in the on-demand environment and then move to on-premise, and there's no reimplementation. Partners can skill up once, invest once, do the consulting, and build an actual property around it, then leverage that investment across a bunch of different options.
How many partners will the technology be made available to?
We've got about 300 partners in our existing technology adoption program. It's a mixture of VARs, ISVs, network service providers and system integrators. Locally, we have one partner: Perth-based systems integrator, Power Business Systems. The nominations for the next local round will broaden that out to 30.
How does Microsoft plan to differentiate itself against players like Salesforce.com and NetSuite?
Let me address the traditional CRM guys first. A lot of our focus is around end user adoption and productivity. The last 10 years taught us that dropping hugely expensive and complex CRM on your people and your environment is not the path to CRM success. I often liken it to trying to put an F14 fighter pilot cockpit in front of all your employees when the reality is most aren't F14 fighter pilots; they are just people who want to get their job done.
I think SaaS has a tremendous amount of validity, but there's a large part of people who don't want to rent their applications forever. Salesforce. com and NetSuite require you to rent it from them forever. It's much like leasing versus owning a home: there are pros and cons to both. Many people in it for the long haul might choose to go ahead and buy and maintain it themselves rather than pay for it every single month as a subscription.
What does SAP's major commitment to the SaaS market mean for Microsoft?
We're glad they are once again getting serious about this. In the CRM space, they've gone through a number of oscillations. They don't seem to be completely committed to SaaS, and I think people are trying to understand what they're going to do in that space. We're focusing on our own value proposition: power, choice and user productivity.
What does a partner need to offer a hosted CRM model?
Data centre capacity is relatively inexpensive these days, and there's lots they can do. Essentially, it's about running a box with Windows and SQL Server. Then they can implement their own intellectual property around that in terms of business process definitions, workflow and data mart extensions.
What will be the next big wave in CRM?
Analytics is a very interesting area. It is the one level of dashboards and data mining where you can get more out of their systems to tell people what to do. The next level of CRM is making better decisions based on what you do with customers, and that's what analytics layers on top.