Microsoft Dynamics CRM Online goes GA

by Chris Kanaracus

April 22, 2008 —

Microsoft will announce Tuesday that Dynamics CRM Online, the Microsoft-hosted
version of Dynamics 4.0, is generally available in North America.

Early access customers have been using the anticipated on-demand offering for
months. It will compete with the likes of Salesforce.com, which just made a
high-profile announcement regarding its integration with Google Apps.

"Our own data centers are now up and running, and we're open for business,"
said Brad Wilson, general manager of Dynamics CRM, in an interview.

Dynamics 4.0 is also available in partner-hosted and on-premises forms. The
three versions employ a common codebase, meaning users can move easily from
one mode to another, according to Microsoft.

Microsoft has no plans yet to offer CRM Online outside of the U.S. and Canada,
although international expansion is "under consideration," the company
said. Some of its overseas partners already offer hosted CRM services using
Microsoft's software, it noted.

CRM Online, which was recently renamed from CRM Live, comes in two pricing
ranges. The Professional edition provides 5G bytes of storage and costs US$44
per user per month. Microsoft is running a special through the end of the year
that charges $39 per user.

The Professional Plus edition offers 20G bytes of storage and is priced at
$59 per user per month. "The only real functional difference is, Professional
Plus gives you offline [data synchronization]," Wilson said.

Customers will also have access to a Web services-based software development
kit (SDK) for conducting integrations: "You might have a portal built in
any kind of technology you want. You can reach out to our system and pull data
into your portal."

The pricing includes "full-suite" CRM, Wilson stressed: "We
don't nickel and dime you, we don't charge you anything to turn on marketing."

This is a key detail of Tuesday's announcement, said China Martens, a senior
software analyst with The 451 Group.

"What's new is Microsoft saying that that cost will include full CRM --
salesforce, service and marketing automation -- that will make the pricing very
aggressive," Martens said by e-mail.

While other software-as-a-service (SaaS) providers "pack a lot of additional
charges on top of their base prices," she said, "Microsoft isn't doing
that, which is a cool and important differentiator."

With CRM Online, Microsoft is also changing the way it has traditionally done
business, as it has traditionally sold its CRM offerings through partners, not
directly to customers.

Wilson stressed that the channel will play a key role in the launch.

"I firmly believe that customers have a better experience with CRM when
they involve a knowledgeable partner," he said. "Our partners have
a tremendous amount of domain experience. ... Certainly people will want to
self-provision, and we certainly want to enable that. But there's more to CRM
than turning it on."

He also noted that partners will play a role in building out custom workflows,
objects and entities for customers.

But the 451 Group nonetheless anticipates channel conflict, despite Microsoft's
efforts to avoid it, Martens said. "While Microsoft is compensating partners
who bring in sales for CRM Online to the tune of 10 percent of the annual license
revenue in the first year and 15 percent in the second year, Microsoft is also
driving hard here to get business."

To that end, Microsoft's move into on-demand CRM has prompted speculation over
whether it will also introduce a similar offering for enterprise resource planning
(ERP). The company has nothing to announce at this point, Wilson said.

IDG News Service