Microsoft moves into CRM

Microsoft moves into CRM

Microsoft has unveiled its Microsoft Customer Relationship Management tool, a .Net-based CRM offering for small and medium businesses, but the vendor insists it won't be competing against ISV partners in the space.

Microsoft CRM will provide a single, integrated view of contacts with customers, working with Microsoft's Office desktop productivity software and back-office systems from its subsidiary Great Plains Software. It will be accessible from Microsoft Outlook or a Web browser.

The application will have functions for customer service and marketing. It will be available either as a standalone product or integrated with Great Plains Dynamics, Solomon, and eEnterprise back-office products and sold in boxed or hosted versions.

Customer relationship management is a new space for Microsoft -- and it could end up treading on the toes of the many ISVs that support the vendor's operating system and productivity applications. On the announcement of the new service, Microsoft took pains to reassure channel partners and integrators this was not the start of a march into the high-end CRM market. The company will continue to address the needs of midsize businesses through its alliance with Siebel Systems.

But for companies such as Australia's Legrand Software, which has produced CRM software specifically for the small business market, the announcement has raised some eyebrows. "In a sense, it is satisfying for us because they have identified a gap in the market we saw quite a few years ago," said managing director Alain Legrand.

Legrand believes the software will appeal to larger businesses than his target market (that is, 25-100 employees as opposed to the 2-20 employee businesses that Legrand focuses on). He also believes that he has a significant window of opportunity before the Microsoft product hits Australia (not until well into 2003). "There are also issues of bandwidth," he said. "Being a browser-based product, potential customers will need to have their own intranet infrastructure or will need to access the application from an external ASP via the Internet. I think Web-based products will remain slow sellers in the Australian market as small businesses are struggling to afford broadband."

Rob Reid, president and CEO of Web-based CRM vendor UpShot, was also confident Microsoft was not a threat in the short term.

"It hasn't been attacking the real issue with CRM, which is that people are looking for fast results and fast implementations so they can get really good ROI," he said. "This is a licence model they are presenting, selling though distribution, so it will take time for users to evaluate it, get it rolled out, and it might be a year or two before [users] can get their return on investment."

North American users should see the product in the fourth quarter this year, sold by Great Plains' usual resellers, or hosted by selected partners. Elsewhere, it will be introduced in phases starting in the first quarter of 2003. The price will be announced later this year, Microsoft said.

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