Can Microsoft Overtake Oracle and Salesforce in CRM?

Herman Mehling

Updated · Feb 18, 2011

Microsoft (NASDAQ: MSFT) is finally a serious contender in the CRM space, thanks to its mid-January launch of Microsoft Dynamics CRM Online 2011 and yesterday’s launch of the on-premise version.

Regardless of how customers get it, Microsoft Dynamics CRM 2011 signals that Microsoft has upped its game against archrivals Oracle (NASDAQ: ORCL) and (NYSE: CRM), particularly the latter, which has posted big market share gains on the strength of its early lead in online CRM.

“Microsoft Dynamics CRM is one of the few CRM solutions that enables customers to get CRM how it best fits them, whether on-premises, on demand in the cloud, or a combination of both,” said Brad Wilson, general manager of Microsoft Dynamics CRM Product Management Group.

Microsoft has said it intends to aggressively pursue Salesforce’s and Oracle’s customers, offering companies — through June 30 — $200 per user to apply toward services to migrate data or for customization. On top of that, the vendor is offering introductory online CRM pricing of $34 per user per month — a $10 discount available through June 30 for 12 months.


Microsoft gets serious about CRM

Microsoft’s release of the online version first is a clear indication of Microsoft’s desire to emphasize its position as a cloud applications vendor; so are its penetration-focused promotional efforts, wrote Boston-based Nucleus Research in a research note.

The firm noted that $34 per month is “a significant discount over both existing Microsoft and its competitors’ per-user subscription pricing (’s lowest list price for complete CRM — the Professional Edition — is priced at $65 per user per month; most organizations going beyond the basics invest in the Enterprise Edition at $125).”

“Oracle and Salesforce have strong CRM solutions, but the aggressive pricing from Microsoft will cause buyers to give Dynamics CRM 2011 a serious look,” said Forrester Research analyst Bill Band.

Besides low introductory pricing and other financial incentives, Microsoft hopes its flexibility will give customers another reason to switch from Microsoft gives companies a choice of online, hosted and on-premise, while Salesforce only offers an on-demand service.

Microsoft also claims that customers can integrate Microsoft Dynamics fairly easily into existing productivity software and line-of-business applications — capabilities not easily implemented by Salesforce.

Other enhancements to Dynamics CRM include a user interface that looks and feels like Microsoft’s Outlook email client, an interface designed to lower training and support costs, and make it easier for users to get up to speed with the CRM applications. The product will also sport a ribbon taskbar similar to Office 2010 and 2007.

Other features include improved integration with Exchange, SharePoint and Office, as well as with the other components of Microsoft’s business productivity online suite (BPOS).

Developers can take advantage of Windows Azure to develop and deploy custom code for Microsoft Dynamics CRM Online using tools such as Visual Studio, and they can also use Microsoft .NET Framework 4.0 to incorporate Microsoft Silverlight, Windows Communication Foundation and .NET Language Integrated Query (LINQ) into their cloud solutions.

The CRM offering also features an online marketplace that will let partners and customers find, download and implement custom and packaged extensions.


Microsoft’s missing pieces

Still, Microsoft has some catching up to do, according to Nucleus Research: “From a functionality perspective, Microsoft is still missing a clear answer to the cloud-based crowdsourced lead generation and business contact validation capabilities acquired with Jigsaw” (Microsoft provides integration with InsideView, Hoovers and ZoomData).

Nucleus noted that Microsoft also has some kinks to straighten out in billing online customers. Credit card billing would be a good first step. Streamlining access to self-service account management and account information would lower Microsoft’s cost of supporting small customers while making it easier for business users to adopt, Nucleus wrote.


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