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Microsoft CRM Discounts Aim to Lure Salesforce Users

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Posted December 6, 2010 By Stuart J. Johnston     Feedback

Microsoft plays the alligator in the punchbowl at Salesforce's Dreamforce conference.

On the eve of's Dreamforce 2010 conference in San Francisco, Microsoft is offering a rebate on its own hosted online customer relationship management (CRM) package.

In an "open letter" published in the western regional edition of The Wall Street Journal, Microsoft (NASDAQ: MSFT) today announced a rebate offer it will run through June 30, 2011 for customers who switch from Salesforce (NYSE: CRM )to Microsoft Dynamics CRM.

"Microsoft aims to convince attendees that its customer relationship management solution offers more value [than Salesforce]," Jamie Fiorda, group product marketing manager for Microsoft Dynamics CRM, said in a statement.

Dynamics CRM is the CRM component of Microsoft's hosted online services offerings.

"Now through June 30, 2011, Microsoft will rebate eligible and Oracle (NASDAQ: ORCL) customers up to $200 for each user to make the switch to Microsoft Dynamics CRM Online. The offer can be applied for services such as migrating data or customizing the solution to meet unique business needs," the statement said.

Although Microsoft's Journal ad is an obvious play for some of the 30,000 customers that Salesforce officials say are at the show, it's not the first time that the software giant has tried to undercut Salesforce around the time of its annual developer conclave.

Last year, just before Dreamforce 2009, Microsoft introduced a seven-month free trial offer for users who switched from Salesforce or Oracle to Dynamics CRM.

Meanwhile, the latest version of Dynamics CRM is currently in beta testing, which started in September.

"Formal launch events for Microsoft Dynamics CRM 2011 and the upcoming global release of Microsoft Dynamics CRM Online will begin in January 2011," a Microsoft spokesperson told in an e-mail.

Although late to the online services model, Microsoft has made major investments in data centers worldwide in the past five years in an effort to dominate the online services market. It has also instituted offering its own services, mostly through its Business Productivity Online Suite (BPOS), a set of hosted enterprise software delivered as services ranging from email and instant messaging, collaboration, to unified messaging, and conferencing.

In June, Microsoft claimed to have some 40 million paying customers for its hosted online services already, many of them BPOS seats.

If Salesforce executives feel at all intimidated by the moves, though, they're not showing it. "I don't think $200 is going to change many minds," Kendall Collins, chief marketing officer for Salesforce, told

"Yes, people pay more for Salesforce, but on a longer view, it's cheaper to maintain," Collins said.

Later next year, Microsoft also plans to incorporate Dynamics CRM Online into Office 365, Microsoft's next generation of BPOS.

Microsoft and Salesforce were also recently in court after suing each other for patent infringement.

Ultimately, in August, the two companies settled out of court, with the two cross-licensing each others' patents, but Microsoft apparently coming out ahead, receiving a check from Salesforce.

Microsoft's letter is available online.

Stuart J. Johnston is a contributing writer at, the news service of, the network for technology professionals. Follow him on Twitter @stuartj1000.

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