Microsoft Business Solutions To Show Off New Great Plains, Mobile CRM

That's the implicit--or not so implicit message--MBS and "Microsoft Classic" partners have heard in the months leading into Convergence 2004, the annual MBS customer event next week in Orlando.

Instead of focusing on futures, the Convergence spotlight will be on near-term deliverables including Great Plains Version 8, due to beta soon and to be generally available this summer, sources said. The new financial software will sport an interface mimicking that of Outlook Web Access (OWA). Microsoft executives briefly previewed the new look-and-feel at last year's show. (See story.)

The mobile support for Microsoft CRM, to be delivered in a service pack this summer, will bring handhelds running Microsoft operating systems into the CRM fold. It is part of an already-promised field service update.

A bit further out, the release of Microsoft CRM 2.0 has slipped from the end of this year to first quarter of 2005, several sources said. The current version is Microsoft CRM 1.2.

A Microsoft spokeswoman confirmed that the company will demonstrate mobility features and new Great Plains technologies but would not comment on timing of their delivery.

To further penetrate the market and take on Salesforce.com and Salesnet, Microsoft is also recruiting a range of CRM hosting partners who will offer that solution at a low per-user price, insiders confirmed. The hope had been to announce the new partnerships at Convergence, but the news will now likely come later as Microsoft sorts out service provider licensing agreements (SPLAs) necessary for this model, sources said.

A hosted solution offering just sales force automation (SFA) features could act as a placeholder for companies while they ponder weightier implementations, Microsoft partners said.

"Microsoft doesn't want people installing thin SFA from Salesforce com. If there's thin-SFA going in, they want it to be from Microsoft," said Dan Duffy, CEO of ePartners, one of two current Microsoft CRM hosting partners. The other is Surebridge, Lexington, Mass. ePartners hosted CRM weighs in at $65 per user per month.

Duffy said hosted Microsoft CRM is a perfect placeholder technology for companies still pondering a move to this application area. "I could name many prospects we've run into who, for whatever reason, want thin SFA and wanted it immediately even if they know they'll rip it out in a year," he noted. For Microsoft that's an irresistible prospect. One option then would be to move the customer from the hosted system to an on-premises implementation, providing upsell opportunity for partners and Microsoft alike.

Not one to shy away from a fight, Salesforce.com CEO Marc Benioff scoffed at the notion of Microsoft's CRM effort, even as he continues to pledge allegiance to the Microsoft platform. "Microsoft CRM is the biggest disaster at [the company] since Microsoft Bob. Customers just don't want more client/server software. They certainly don't want to be locked into all Microsoft Clients and all Microsoft Servers," he said. Bob was an ill-fated consumer interface for Windows.

Even some MBS partners say that Microsoft has much work to do to make Microsoft CRM a truly scaleable and "hostable" product. Right now the hardware requirements are too high and Active Directory issues complicate implementation, said one west coast partner.

At Convergence, as Microsoft tries to bolster business applications sales in the here-and-now it will also downplay references to Project Green, the "next-gen" code base and the MBS applications that will run on it. Green is due in an unspecified "post-Longhorn" future.

Product features and philosophies aside, Microsoft also faces issue around melding its two very different channel models and cultures. The process was announced last fall and execution started in January.

MBS, which fields Great Plains, Navision, Solomon, Axapta, and Microsoft CRM applications, is under pressure to mimic the volume sales Microsoft has come to expect from its other businesses of which Office is a prime example. MBS partners have long said, however, that such volumes do not come naturally to the slower, "higher-touch" business application sales process. And those differing expectations are at the root of much channel angst around Microsoft this past year. For more on Microsoft's channel changes (See story.)

Long-time Great Plains partners, for example, were used to a much closer and personal relationship with that independent company than they have any reason to expect with Microsoft. Many of the Great Plains partners, for example, were on a first-name basis with Doug Burgum, formerly president of Great Plains and now senior vice president of Microsoft Business Solutions. (Microsoft bought Great Plains in late 2000 and Navision the subsequent year.) Now these partners are jostling for face time with tens of thousands of other Microsoft partners, some of whom want to move onto their turf.

"The only concern ... is where do we get left? Microsoft is such a large organization and has so many resellers of different types and different types of products%85the quaint channel we used to be is no longer. We are now lumped together with every other reseller," said Dallas Wilt, CEO of Axis Accounting Systems, an MBS partner with Great Plains expertise.

Wilt says Microsoft is giving credit where credit is due. "They've announced a higher bar for their certification program and that's great for us because we have all the certs we need to reach that height and that will help us distinguish ourselves. I think they're taking some good steps," she said.

There is no doubt Microsoft is feeling some urgency about MBS performance. While the group posted a 41 percent revenue increase in Microsoft's second quarter over the year-ago period, much of that gain was attributed by observers to a change Microsoft made to the Navision maintenance model, raising the charges to align them with maintenance fees for the rest of the MBS line.

Several MBS partners say that Microsoft CRM will do better in the field as it matures and adds features and functions. "Look, many customers will kick the tires but they won't buy a version 1 product. They wait for version 2," said Linda Rose, president of Rose Business Solutions, a San Diego MBS partner.

Microsoft has set the bar high. Microsoft Senior Vice President Orlando Ayala last year said the company wants to field a $10 billion business applications business by 2010 and pledged continued investment towards that end. But solution providers and company insiders say that current sales have been somewhat underwhelming.

Asked if Microsoft was disappointed by MBS performance thus far one long time partner who requested anonymity said, "That's a [expletive deleted] wild, wild understatement."

The timing is tricky. The channel reorganization that started to roll out in January caused a redeployment of Partner Account Managers and Partner Engagement Managers in the field. Those moves disrupted many long-standing relationships, but the goal was to streamline and rationalize the sales process. (See story.)

Many partners counsel patience. Microsoft has "to recognize this was an enormous year of change," said Alan Kahn, CEO of InterDyn, a New York MBS partner. Changes with people and processes in the organization and the economy at large were all factors, he said.

"They've gotten the massive Microsoft organization to understand that MBS is relevant and important but that doesn't mean they're getting full leverage. Business solutions is more complicated. There's a learning curve,[and] even though they've got people educated and motivated, the familiarity level is not there yet," Kahn said.

Microsoft is encouraging "classic" partners to enter the MBS arena, by getting the necessary certifications. That alone causes consternation among the much smaller set of MBS partners. On the plus side, several partners on both sides of the aisle report they are doing more joint work with other partners to deliver solutions. Yacov Wrocherinsky, president of Infinity Info Systems, a New York MBS partner said he's hired a full time person to handle partner management issues in anticipation of more such engagements.