Microsoft Provides Various Ways to Consume CRM 3.0
by Alex Woodie
Microsoft this week shipped a new version of its customer relationship management software that give users new ways to interact with the software, including a new user interface that piggybacks on the Outlook e-mail client, and a new hosted version of CRM for users that don't want to run the software themselves. New marketing and service scheduling modules, improved reporting, and enhanced customization also accompany this release.
Microsoft's CRM application is designed to help companies consolidate their customer data into a single repository, where it can be analyzed by business professionals, most often those working in some type of sales, marketing, or customer services capacity. Microsoft targets companies of all sizes with its CRM app, which was officially renamed Microsoft Dynamics CRM as part of its Microsoft Business Solutions Dynamics initiative announced in September.
CRM 3.0 is available in two editions: the Small Business Edition, which is designed to run on Windows Small Business Server 2003 Premium Edition and is limited to 50 users, and the Professional Edition, which is the only version available to those who aren't using SBS. Both of the applications contain the same basic sales, marketing, and customer service modules.
In terms of sales capabilities, CRM helps users organize the sales process and manage their pipeline, from drumming up leads and making initial contact, to following through with sales literature and finally submitting that invoice. With CRM 3.0, Microsoft has delivered new marketing automation and customer service modules. The software includes tools for planning, implementing, and monitoring multi-tier sales and marketing campaigns, including creating a list of leads, writing letters or direct-mail pieces, launching the campaign, and then tracking the progress and results.
The new service scheduling module in CRM 3.0 contains a scheduling engine and service calendar that allow managers, salespeople, and customer service representatives to set up service engagements. A top-down view of scheduled activities allows managers to make better use of employees, vehicles, and other equipment, the company says.
This release also includes new reporting capabilities for analyzing customer data residing in CRM 3.0. Microsoft says this release uses SQL Server Reporting Services as the underlying report engine, which simplifies report generation and also makes it easier for users to broadcast reports using e-mail or Web portals.
But the most important enhancement in CRM 3.0 is the user interface, according to Microsoft, which said "the foremost design objective in creating Microsoft CRM 3.0 was tighter integration with Microsoft Office Outlook." By integrating CRM into Outlook--the most popular e-mail client in the world--CRM users can look up customer information, send and manage e-mail, set up appointments, and capture customer discussions, "all without ever leaving Outlook," Microsoft says. If staying in Outlook all day is too much too bear, users can choose the browser-based client to access CRM apps, and keep wearing down their Alt and Tab keys as they switch between open windows. A mobile client is another consumption option.
Another significant new feature with CRM 3.0 is the new hosted delivery option, which will become available January 1. Instead of running CRM 3.0 on their own server or servers, customers can now opt to let a third party do all the heavy lifting, and not have to worry about procuring new servers and disks and power supplies and all the other little things that make IT such an exciting and dynamic profession.
These new delivery models give Microsoft's claim that its new CRM app "works the way you do" some credence, but whether Microsoft can turn that catch phrase into a big revenue increase has yet to be seen. It lags heavyweights SAP, which led the CRM market with $1.6 billion in sales in 2004, according AMR Research, and Siebel, which had $1.3 billion in CRM revenue in 2004 and is in the process of being gobbled up by Oracle. Microsoft had CRM revenues of $202 million in 2004, which AMR expected to increase to $232 million this year.
The good news is that hosted CRM is a very hot area right now. Salesforce.com, which is widely credited with popularizing the hosted CRM model, grew its annual revenues from $96 million to about $176 million during calendar year 2004, and overall hosted customer management applications grew 105 percent that year, according to AMR.
Third-parties selling access to Microsoft's CRM over the Web are free to set their own prices. Those running the software themselves will pay $622 to $880 per user and $1,244 to $1,761 per server for the Professional Edition, and $440 to $499 per user and $528 to $599 per server for the Small Business Edition.