Industry prepares for Microsoft CRM's arrival

Industry prepares for Microsoft CRM's arrival

Microsoft is poised to launch its closely watched CRM (customer relationship management) software, prompting customers and industry rivals to brace for the arrival of a package that could prompt an upheaval in the CRM sector.

The suite, due to be released by Christmas, is the first major built-from-scratch offering of Microsoft's newly constituted Microsoft Business Solutions unit, created by combining acquired vendors Great Plains Software and Navision Software A/S with Microsoft's own bCentral information portal group. It's also the company's first application built on .Net, Microsoft's much-hyped but nebulously defined platform for systems integration and Web services.

When Microsoft announced in February its intention to enter the CRM market, initial industry buzz was that the move could spell trouble down the road for CRM powerhouses, particularly Microsoft partner Siebel Systems. But analysts, other vendors, and Microsoft itself say that for the time being, Microsoft's CRM package will appeal mainly to entry-level CRM buyers.

"The real opportunity for a company like Microsoft is to apply its skills around sales and marketing, and that really means going into the low end. For the most part, the big vendors have never really focused much there at all," said Jim Shepherd, a senior vice president with AMR Research in Boston. "Companies in the US$50 million-to-$200 million range will absolutely see Microsoft competing there."

Microsoft CRM will include account activity and history tracking features, reports, order management functionality and communications tools. The software will integrate with Microsoft Office 2000 and Office XP applications.

With prices starting at $395 per user (plus $995 for the server) and a channel-focused sales strategy, Microsoft says the software is aimed at companies with several dozen to several hundred employees.

Microsoft CRM comes in two parts: a Sales Module and a Customer Service Module. The two modules integrate tightly with each other, with Microsoft Office and with several other Microsoft Business Solutions products, including the company's Dynamics, Solomon and eEnterprise software, according to Microsoft.

The Sales Module includes automated leads-routing and escalation, account tracking, product-catalog creation tools, order management, employee sales performance monitoring, and communication features through connections to Microsoft Outlook.

Microsoft CRM's Customer Service Module handles case management, routing, contract maintenance, automating e-mail responses and customer-communications tracking.

The software functions as both a desktop client, accessible through Outlook, and as a Web application reachable via a browser. It will also take advantage of synchronization technology that allows users to work offline.

Pricing for the software ranges from US$395 per user plus $995 for the server for a standard Sales module package to $1,295 per user plus $1,990 for a "Professional Suite" package. Microsoft CRM will be sold and implemented through the Microsoft Business Solutions division's reselling partner channel.

The software is currently scheduled to ship on December 23, although that date has slipped before and could slip again. But Microsoft isn't planning to pick up its promotional campaign for the software until January, preferring to wait until after the holidays to begin pushing the package, according to a company spokeswoman.

According to AMI, Microsoft is well-poised for a major push into the SMB CRM market. The sector will grow more than 50 percent annually, to around $2 billion by 2006, AMI forecasts.

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