Microsoft CRM Gets Down To The Wire

Release candidate one of the low-end CRM package is available now, and the final product appears to be on track to ship as promised by year's end.

Partners said the code looks solid and that it's unclear whether there will be a second release candidate.

MS-CRM touts tight integration with the Microsoft Outlook mail client and offers the basic sales force automation capabilities many companies need, channel players said. It does not have all the bells and whistles that Siebel Systems' CRM product is known for, but for "many companies, [MS-CRM will be good enough," said one east coast CRM specialist.

Viewed in better times as a killer enterprise application, CRM is at a turning point, said Ben Holtz, president and CEO of Green Beacon Solutions, a Watertown, Mass., CRM consultant.

"You've got midmarket players like Onyx and Pivotal pushing up, and big guys like Siebel trying to come down, and new players like PeopleSoft and SAP entering, and then midmarket guys like SalesLogix and Goldmine trying to keep share," said Holtz, describing the players in the increasingly crowded space.

Microsoft's very decision to offer CRM products, first reported by CRN last year, (see story) was controversial because the company was entering a field where many of its big ISV partners were already entrenched. Indeed, Microsoft's Great Plains group bundled its own midmarket offerings with Siebel Midmarket Edition.

When Microsoft finally spilled the beans on its CRM plans last February, many predicted the Great Plains/Siebel package was finished. Seven months later, it was. In September, Microsoft and Siebel said the pact would not be renewed. (see related story.)

Both companies positioned the parting as amicable. Indeed, within weeks, Siebel Chairman and CEO Tom Siebel and Microsoft Chairman Bill Gates traded pledges of mutual support--Microsoft said it would back Siebel's Universal Application Network EAI game plan with BizTalk, and Siebel threw more weight behind Microsoft .Net. The two companies also said they'd spend $250 million to promote .Net in the enterprise, a key Microsoft goal. Siebel has weight in the enterprise applications that Microsoft does not. (see related story.)

Since the Siebel-Great Plains divorce, many in the channel have been puzzled as to Siebel's midmarket game plan. Last year, the company launched its ACE partner initiative, seeking traction in mid-size companies with partners. But that effort pretty much fizzled with the economic downturn, solution providers said. While the company continues to offer its Midmarket Edition, partners said it has not been widely adopted. Other Siebel OEM deals with Lawson and J.D. Edwards have also ended.

Siebel learned that just taking its existing CRM package and "dumbing it down for smaller businesses does not necessarily make it easier to install and deploy," said Steve Bonadio, analyst at The Meta Group.

But no one really believes Siebel has given up on the midmarket, where IT spending is at least somewhat more robust than in the enterprise. The company is making noises about reviving the ACE partner program, sources said. Some channel players believe the company is now fully aware of the importance of integration with Microsoft Outlook, for example, and think Siebel will be forced to drastically alter its midmarket offerings.

"I wouldn't be surprised if they do a new code base for this market," one reseller said.

Siebel could not be reached for comment.

Microsoft has been careful all along to position MS-CRM for lower-end customers below where Siebel typically plays. While not ruling out sales into departments within enterprises, Doug Burgum, president of Microsoft Business Solutions, told CRN last fall that MS-CRM's migration into the enterprise will depend on channel partners.

"There's a lot of copies of ACT in the enterprise, so I would never say we are never going to do departmental if someone wants to buy [MS-CRM, if some reseller wants to put it in a corporation," Burgum said. "What I said is the upper limit will be where our partners want to take it.'

Burgum also noted that MS-CRM will be a first-release product, while Siebel has had years to refine and hone its offering.

"It will be multiple releases before we even have the functionality of Siebel Midmarket," he said. "Tom [Siebel is not standing still. He's spending more CRM R and D than anyone else. He's going to keep moving that functionality ahead.'

Pricing for MS-CRM will start at $395 per user plus $995 for server for the standard edition, to $1,295 per user and $1,990 for server for the professional version.