At Last: Microsoft CRM

As first reported in CRN last summer, the company is working on a CRM server as well as basic CRM applications. (See story.)

Microsoft CRM, as the product will be called, will be unveiled Tuesday, the company said, and is slated to ship by year's end.

The product, which will include a core CRM server plus sales force automation (SFA), customer service, and basic marketing applications, targets the small enterprise, said David Thacher, general manager of CRM for Microsoft. The product was built from scratch using Microsoft's .Net foundation technologies and Visual Studio.Net, he said.

Users have the option of running the product in zero-client footprint mode, or using it with with Outlook to gain offline capabilities. The latter choice, which utilizes the desktop version of SQL Server, will let offline users come up with immediate price quotes on the road.

With this tight Outlook integration, users will not have to toggle back and forth between their e-mail and calendar and their CRM application, the company said. Such tight links are attractive, especially to small businesses, observers said.

"Even the promise of integration is very compelling in the midmarket," said Erin Kiniken, analyst with Giga Information Group.

Thacher said Microsoft CRM will fit into the company's product list just under Great Plains Siebel Front Office. The target audience is companies with 25 employees or more but without a dedicated IT staff. Microsoft feels there is a gap between the low-end bCentral offerings and the Onyx, Pivotal, Siebel portfolios, analysts said. Microsoft CRM is the company's attempt to plug that hole. Microsoft's bCentral offers some CRM capabilities for very small businesses in an ASP model.

Thacher was adamant that Microsoft CRM will be be run on-premises. "I think people see .Net and think immediately of services and software delivered over the Web. We see this more as a box of diskettes that companies will run for themselves," he said.

Some observers said that positioning this new offering vs. the existing Great Plains Siebel Front Office is bound to be confusing. "The interesting thing will be to see what the Great Plains reseller channel does as they'll get a chance to sell either the Siebel or Microsoft offering," said one source.

And, others see this as the first step in which Microsoft will attack enterprise CRM, eventually taking on Siebel itself.

Thacher said Microsoft remains a big Siebel partner, and the small and medium enterprise space that its new product targets "is plenty big for us." He estimates that market will hit the $30 billion to $40 billion mark within five years. He also said Microsoft's current partnerships with Onyx and Pivotal Software, two Windows-centric CRM players, remain strong.

Microsoft CRM, internally known as MSCRM, is just the first of many planned .Net-focused business solutions products from the company. According to internal Microsoft documents, the company also plans data mining and analysis capabilities that will run across its application components.

Gartner analyst Esteban Kolsky characterizes Microsoft's initial CRM work as a trial balloon. The company will likely jump into big-time CRM, but probably by buying its way in, he said. "It takes a long, long time to build a real CRM product. This may be the first .Net product, but so what? A lot of that is smoke and mirrors."

Whatever Microsoft's plans, it has to make them clear, others said. "They need to lay out their intentions and stop all this speculation or analysts and journalists will assume the worst," said Kelly Spang, analyst with Current Analysis.