November 03, 2009, 10:10 AM — Microsoft is trying to steal away Salesforce.com and Oracle CRM on Demand customers with a new offer that will provide them with six months' access to its own CRM Online application at no charge if they sign a 12-month contract.
Microsoft charges US$44 per month per user for CRM Online Professional edition. That compares to $65 per month per user for Salesforce.com Professional. Oracle CRM on Demand pricing starts at $70 per month per user.
Meanwhile, Microsoft's application is comparable from a feature standpoint and "already about 35 percent cheaper" than the competition, said Brad Wilson, general manager of Dynamics CRM.
The six-month offer is valid through the end of this year. Microsoft will consider expanding access to customers of other CRM products once it sees how well the program is received, Wilson said.
Six months is about how long it takes a customer to know for sure whether an application is right for their business, said Ray Wang, partner with the analyst firm Altimeter Group.
But potential hurdles lie in the way of a smooth transition over to CRM Online, he added. For one thing, a customer and Oracle or Salesforce.com may have a year-to-year deal, which might still be in effect when the six-month trial period expires, Wang said.
While contract terms may allow the customer to cancel, they may not get a refund on the year's remaining fees, according to Wang. "Hopefully you'd be [signed up] month-to-month. It's good to check and see where you are in that process."
Overall, however, "users win" in price wars like this, Wang said.
Microsoft on Monday also announced price cuts for its Business Productivity Online Suite. Other SaaS (software as a service) vendors, such as NetSuite, have made a steady stream of financial enticements in recent months too, as sales slowed during the global recession.
Salesforce.com has also quietly lowered monthly per-user fees for its two lowest-end editions, Contact Manager and Group Edition, to $5 and $25 respectively, down from $9 and $35.
Meanwhile, Microsoft is announcing the CRM switch-over deal in conjunction with an update to CRM Online, Wilson said. It is also planning to roll out the software worldwide in the second half of 2010, he said. The service is now available in North America.
In the new release, Microsoft made signing up for CRM Online "super-simple," he said. No credit card information is required to sign up, although users need to provide an e-mail address. They can then start a free trial with either Microsoft's Outlook client or a browser-based interface, Wilson said.
Thirty-day trials include sample data so users can begin experimenting with the system. A series of help tools provide information on setup and maintenance. Microsoft has also developed an improved data import wizard. In addition, mobile access is available at no additional charge for any phone with a HTML 4.0-compliant Web browser.
"We specifically tried to engineer [the application] to make it really easy for people who don't have CRM systems," Wilson said.
