Microsoft Dynamics’ Slick Strategem

Microsoft did some smart things last week when it announced its Dynamics CRM Online service. Most of the headlines will focus on the teaser rate or introductory pricing of only US$34 per seat-month for 12 months. Until June, users of Oracle CRM On-Demand and Salesforce who switch will have an added inducement of up to $200 per user, which everyone acknowledges ought to go to conversion costs.

There are other reasons to be charmed by Dynamics CRM Online, which we can review below, but the emphasis on takeaways leads me to ask the question: Is the CRM market becoming saturated? In a saturated market, that’s typically what vendors do — keep the installed base happy and try to poach from the other guy.

But CRM doesn’t look saturated to me. Just last week I was speaking with a company that had built its own solution and was looking for help selecting something more standard. It is surprising how many companies like that are still out there. With big analyst firms predicting double-digit growth and many billions in sales for CRM over the next several years, I think I am in good company when I say saturation is not on my radar.

The Business of Selling

But that’s not to say that some amount of switching inducement is not in order. For instance, Greg Gianforte, CEO of RightNow, told me recently that in his area of focus, the service center, there’s good switching activity in part because many of the service center vendors and their products from the client-server era are reaching end of life. Some vendors haven’t kept up, some are out of business or taken over, and you can’t do some of the things customers want and need, like social, if the vendors haven’t kept up with cloud solutions, for instance. That’s not Microsoft’s issue.

Also, Microsoft representatives have told a similar tale about aging back-office systems and a shift now happening to retire older systems. So perhaps for the first time in this cloud- and browser-based era, there are significant reasons for companies to consider swapping out their front- and back-office systems.

But that’s all back office and service systems. What about sales and marketing? Pure SFA has never been a box office favorite with the masses. Early systems didn’t provide enough value to the end user, and eventually even managers determined that the amount of information coming from first-generation SFA was lacking. But SFA has been increasingly saved by the efforts of people in the marketing automation business.

Marketers were arguably the first in the front office to see the promise of social media and to take advantage of it. The result has been a steady stream of better leads from techniques like lead nurturing and various customer analysis schemes which are supported by vendors like Eloqua, Marketo, SAS and others.

Sales seems to be more open to accessorizing than other parts of the CRM suite, or perhaps that perception is simply an outgrowth of Salesforce.com’s openness and their AppExchange. Whatever the cause, companies like Cloud9 Analytics have been able to take the raw data out of Salesforce and provide managers with the analysis and real information that SFA systems alone fail to support. The result has been continuous improvement in selling and marketing.

Bases: Covered

Back to Microsoft Dynamics CRM Online. I suppose they could have found a longer name, but this will have to do. I’ll just call it “Online”. Online is a direct challenge to Salesforce and Oracle and employs the same code set, Microsoft CRM GM Brad Wilson tells me, as the on-premises CRM solution. In fact, about the only thing different is the branding, which I can appreciate. Online means a SaaS or on-demand product hosted by Microsoft. Partners can host too, but they add custom applications and other value add to Microsoft Dynamics CRM.

Partners also adhere to a more standardized form of SLA than they did a couple of years ago, but anyone considering a SaaS solution from any vendor ought to read all of the small print. Having an uptime commitment is essential, but it’s not the only thing. For instance, knowing whether the data center is mirrored is important because it impacts how long you’d be down in a worst-case situation. Good back-up is nice but not if you need 48 hours to spin all of the tapes to get back to work. Good news here: Microsoft continues to invest in its data centers to provide the peace-of-mind factor for its online products.

Microsoft also launched a Babel of languages — 40 in 41 markets — for Online. That should cover about 110 percent of the world’s business centers, plus Mars if we ever get there. The user interface has many graphical features and dashboards and is highly configurable by the user. It is also well-positioned in Microsoft Office integrating with applications like Outlook to take advantage of user familiarity with email.

There is also the concept of a ribbon at the top of the screen that holds a graphical function menu. The ribbon changes with every change of location within CRM. It’s a great way to eliminate irrelevant tabs and bring forward the functions most needed for the work at hand. I like it.

I have not been through the product from stem to stern so there are loads of things I am not going to comment on. But it was difficult to get some information that should have been available. For instance, I run a Mac and I have many browsers but the analyst briefing was conducted using Live Meeting and Internet Explorer, so I was locked out. I know Microsoft is sensitive about its standards and wants the world to use its products, but this is the Internet and refusing to play nice with the other guys is no way to promulgate a standard. In fact I find this a bit churlish.

There’s no doubt that Microsoft is “all in” as they like to say. Steve Ballmer gave the keynote for the kick off and other senior executives also spoke. All in all, this is a good effort, but from the videos I’ve watched, my impression is that there isn’t enough integration of social media in the business processes demonstrated so, to me, the effort appears to be more 1.x than 2.0. But perhaps I simply missed something because of browser incompatibility.