Microsoft launches CRM siege on productivity, performance and price

Microsoft launches CRM siege on productivity, performance and price

As Dynamics CRM Online launches outside of America for the first time, MyCustomer.com speaks with Microsoft's Bill Patterson.

Microsoft Dynamics CRM Online is available outside of North America for the first time from today (Monday), and the software giant claims it has drawn a line in the sand on productivity, performance and price as it looks to poach significant custom from Oracle and Salesforce.com.
With the Microsoft team having recently talked up the "huge opportunity" that CRM represents for the Redmond firm, Bill Patterson, director of product management for Microsoft Dynamics, was keen to talk at length about the significance of the launch.
"We offer full CRM in the Cloud and on-premise from the same code base. We have a better user experience for businesses that want to adopt and be productive with CRM. We have a richer customisation sensibility model with the likes of .Net and ultimately we offer more value at a much lower price. So the combination of those four assets really makes this one that will be tough to compete with," he explained.
Power of productivity?
In promotional material, the launch is being hung on the solution's capacity to deliver the "power of productivity" to customers – for instance that its native Microsoft Outlook client offers sales professionals a familiar user experience; that it provides access to real-time data while its Cloud rivals "offer static data snapshots that you have to refresh or analytics that are 24 hours delayed" according to Patterson; and that it can offer a more connected experience through flexible Cloud development Windows Azure interoperability, contextual Microsoft SharePoint capabilities and the launch of a new Microsoft Dynamics Marketplace which will tap into the broader .Net ecosystem for partners and developers who are building industry solutions, extensions and line of business applications.
"We’ve really taken to heart the notion that companies still need to focus on end user adoption for their CRM investments," says Patterson. "And what we’re doing with the CRM Online service is it’s a Cloud service that seamlessly interoperates with your productivity software like Outlook, Excel and Word to help end users really get more value out of their productivity software by adding customer relationship management information into those applications."
Patterson adds: "This solution has been in beta since September and what our beta customers and partners are telling us is that this is the most transformative release not only from the Microsoft Dynamics team but really from their experiences working with Microsoft products. It has been in use from over 11,500 customers and over 2,000 partners have helped to get this solution ready for the launch. We’re excited and so is our customer-partner ecosystem."
Price and performance
Price will be one of the main battlegrounds for CRM Online as it tackles competing solutions, with a promotional price of $34 per user per month for the first 12 months of service being offered for customers who sign up in the next six months. Speaking last year, Dynamics CRM general manager Brad Wilson emphasised that the Redmond businesses wanted to make the point that on-demand CRM was "still pretty expensive".  
"On-demand pricing has been incredibly high for businesses today," agrees Patterson. "Comparable solutions from the likes of our competition would require that you’re paying anywhere from $125 per user per month to $150. We’re offering the same or similar capability, with a better user experience, with easy customisation model and the ability to use .Net, at a price point that is $34 per user per month. If you look at the simple order of magnitude between those two price points, we really do think this market can serve to be a little more affordable and digestable for today’s businesses that are being asked to question every spend."
Microsoft is also throwing down the gauntlet with its performance promises according to Patterson, with a service definition that offers a "full financially-backed 99.9% uptime guarantee" for every subscriber, which he says is the industry’s best.
"With other vendors like RightNow or Oracle, to get a service level agreement, you’re not talking about 99.9%, you’re talking 99.5% or paying a premium to get to 99.7%. From a services agreement, vendors have to push harder. With the likes of Salesforce.com, you don’t even get an SLA for your service. But if we don’t meet 99.9% you don’t pay."
Customer choice
With the on-premise version of Dynamics CRM 2011 to be globally available from February, Microsoft is looking to not only play catch-up with the established Cloud players, but also knock Oracle/Siebel off its perch. Certainly the talk from within Redmond is that Siebel is there for the taking - "the product has aged and does not deliver a good value proposition" Kirill Tatarinov, head of Dynamics, said recently.
This is seemingly a remarkable broadening of ambition considering the rumours at one stage that suggested that Dynamics was in line to be sold off. But from the outside, there is the perception that the wind has changed. It has been noted that Dynamics 2011 has had a more visible release than any other CRM launch in Microsoft’s history while Kirill Tatarinov now reports directly to Steve Ballmer. Those inside Microsoft have also begun to acknowledge the increasing value of CRM as a driver for the wider Microsoft stack and of product pull-through.
But Patterson insists that Dynamics has always been important within Microsoft’s hall of power. "I wouldn’t say that there has been an increase or decrease in the Dynamics priority here at Microsoft. I have been on the CRM team since we released our very first version, and I have seen it grow from our first customer to over 23,000 that we have now, and I’ve always felt it was important. But I do think that it is because businesses now are asking and demanding more from their technology investments that it is well positioned for the furure."
Speaking recently to MyCustomer.com, Benoit de la Tour, the software giant’s vice president of business solutions for EMEA, emphasised that CRM was a "huge opportunity" for Microsoft, highlighting that its CRM business had grown 17% last year compared with flat or slowing growth at two out of the top four players, Oracle and SAP. Importantly for the Redmond business, this means both Cloud and on-premise.
"Our philosophy is still customer choice," concludes Patterson. "We’ve put a ton more innovation into the Cloud service with this release than we’ve ever done. But more importantly, our on-premise version today already has the 41 languages, ships in over 80 countries so we’re still bringing forward our Cloud service to a more global footprint, and that is significant news for our release. Over time our philosophy is still choice. Some customers embrace the Cloud. Others do not. We want to be the world’s only provider today that offers the same functionality in the Cloud that we do on-premise because we’re the only one that has that running from a single code base. And we continue to invest in both equally because we think that is what customers want."
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