In A Down Economy, All Eyes Turn To SMB

At the annual Stampede conference, running the rest of the week, attendees will get a sneak peak of the second beta of Microsoft CRM and hear about how the company plans to position its wide-ranging portfolio of Great Plains, Solomon and Navision products.

But Microsoft isn't alone in attacking SMB business applications.

Tomorrow, SAP will kick off a multi-city "truck tour" touting its SMB in Chicago. SAP will highlight mySAP All-In-One and plans to launch a set of other SMB business solutions in the first quarter. The company, which is trying to build its presence in SMB, is bringing business partners on the tour, acknowledging the importance of solution providers in this market.

Clearly the race is on as Microsoft tries to entrench itself into a potentially lucrative new market, even as enterprise powers like SAP, Siebel Systems, PeopleSoft and others try to come down to SMB. Microsoft partners are likewise getting into the act with Dallas-based ePartners kicking off a 29-city seminar series on the Microsoft solutions.

Large companies have mostly made their back-office business apps decisions, while smaller companies now realize that they have to implement CRM to compete, VARs said.

"Companies have already minimized operating costs with back-office ERP solutions from SAP, PeopleSoft, etc. Now the only way to grow profit is to increase sales, and CRM is how they do that," said Ishu Mirchandani, senior vice president of Leveraged Technology, a New York-based CRM specialist.

Mirchandani said Microsoft's timing on CRM is perfect. It is coming out with a solution that is less expensive than Siebel's, and one that parlays the familiar Microsoft Outlook interface, he said. Companies pinching IT pennies are more likely to give Microsoft CRM a look, he said. "You no longer need to buy a 40-foot truck for three people. You can buy a Toyota," he noted.

Mirchandani said Microsoft CRM could probably gain headway even in large corporations by targeting departmental use, much as Microsoft SQL Server did on the database side. Microsoft's entry into the market is expected to put the squeeze on existing CRM players now in the midmarket, such as SalesLogix, Onyx Software and Pivotal.