Microsoft and Its CRM Strategy

November 30, 2008

Colin Barker’s “How Microsoft Plans to Make Its Mark in CRM” is a must read here. The article is an interview with a Microsoft executive named Brad Wilson. Mr. Barker was firing on all cylinders when he questioned Mr. Wilson. There were a number of interesting points in the interview. Let me highlight several of those that resonated with my research into Microsoft’s CRM products and services.

First, Microsoft has 16,000 CRM customers and more than 750,000 users. Dynamics is not in SharePoint territory but 16,000 is a good number. I wonder why SharePoint doesn’t include CRM functions, hook seamlessly into the flavors of Dynamics, and can’t use the report engine in Dynamics? These questions may be answered at some point in the future.

Second, Dynamics “comes with a choice of either having an on-demand subscription offering or buying the software.” According to Mr. Wilson most of Microsoft’s customers have an on premises installation.

Third, CRM 4.0 is a fully multi-tenanted system that a licenseeĀ  can deploy “from outside the cloud.” I don’t know exactly what this means, but I wonder if the Microsoft approach to multi tenancy works like Salesforce.com’s system. Salesforce.com has some interesting patent documents which struck me as having quite a broad swatch of claims.

Fourth, “Microsoft is investing more annually on data centers than the complete revenue of all the on-demand players–$1 billion annually.” With 90 percent of the customers using Dynamics on premises, I was not clear about the pace at which customers will shift to Microsoft’s cloud system, if ever?

Fifth, Microsoft is providing portions of the CRM product for free. Will this pricing policy jump start a market or will it devalue the Dynamics solution? Who will pay for the big investments in the cloud if much of the Dynamics system is free or low cost?

There’s more useful information in this interview. Dynamics is going to have an impact on the CRM market and on Microsoft’s bottomline. And what does one do to locate information in a Dynamics system? Use the built in system which works a bit like search in Outlook Express or snag a third party tool.

Stephen Arnold, November 30, 2008

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