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4/26/2010
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Microsoft Gets Aggressive With Dynamics CRM

ERP adapter and $19-per-seat pricing pave the way for hybrid on-premise and cloud-based deployments.

Microsoft stepped up its push into the enterprise applications market yesterday with a battery of announcements around its Dynamics line of ERP and CRM software. Highlights include upgrades of Dynamics CRM Online, a new connector to Dynamics GP ERP and steep discounts for customers using both applications.

The upgrades of Dynamics CRM Online, announced at the kickoff of this week's 8,000-attendee-strong Microsoft Dynamics Conference in Atlanta, are aimed and extending customer- and partner-facing capabilities while also extending the global footprint of the service. New portal accelerators give customers a head start on developing eService, Partner Relationship Management (PRM) and Event Management capabilities. The eService accelerator provides an automated customer-service front end with case-submission and lookup capabilities. The PRM accelerator supports secure case management and lead sharing. Event-management capabilities include self-service capabilities for sponsors and exhibitors.

There are more than 22,000 customers and 1.1 million users Dynamics CRM, but the vast majority have on-premise deployments. CRM Online, which counts roughly 1,000 customers currently, has heretofore been focused exclusively on the North American market, but that's about to change. As part of the upgrades announced yesterday, CRM Online gains support for French, Spanish and Portuguese, so North American firms with offices in Canada, Mexico or Brazil can extend their CRM footprint immediately. The move is a prelude to a much wider, global rollout expected by year end that will bring Microsoft Dynamics CRM Online into 32 global markets with support for 41 languages. By contrast, Salesforce.com, has roughly 75,000 customers in more than 70 countries, but Microsoft says it will press its advantage in offering a blend of on-premise and cloud-based services.

"We don't have separate products for Online, on-premises or partner-hosted deployments," said Brad Wilson, general manager, Microsoft Dynamics CRM, in an interview with InformationWeek. "If you're running on-premise and later decide you want to move to the cloud, you can do that because it's the same, multi-tenant code base."

Microsoft's hybrid approach is a key differentiator, according to analyst Ray Wang of Altimeter Group. "One of the reasons customers choose Microsoft Dynamics over Salesforce is the option to keep the software on premise," Wang told InformationWeek. "Believe it or not, there are customers that are still uncomfortable with SaaS, and we actually see the biggest and broadest adoption coming from the largest enterprises, not the small- and midsize-businesses."

Another advantage Microsoft plans to exploit is the big base of 41,000 customers using Dynamics GP ERP software. As part of an upgrade announced last week, a free adapter is now available to link Dynamics GP and Dynamics CRM Online. The majority of GP customers run their software on premises, but Microsoft partners also host the software in local markets around the globe. Whether GP is on-premise or hosted, the adapter integrates front-office CRM systems for sales, service and marketing with back-end systems for accounting, financials and other aspects of ERP.

"This will give our customers full lead-to-order-to-cash capabilities by linking these applications together," Wilson said. "It's another example of using a cloud-based service to what is often an on-premise solution."

In the most overt sign that Microsoft is getting newly aggressive with its Dynamics business, the company yesterday announced a steep discount for customers using both applications. Dynamics CRM Online normally costs $44 per user, per month; existing GP customers can now add CRM Online for $19 per user, per month. It's a naked grab for cloud marketshare against competitors including Salesforce.com, which offers its Professional Edition at $65 per user, per seat.

"The CRM adapter tie to GP is important because it gives customers the choice of taking CRM hosted or on-premise, and of course the $19 per user is very competitive," Wang observed.

Microsoft also announced plans for a new Dynamics AX for Retail offering. Designed for misize specialty retailers, the new version of ERP software is set for release in 16 countries on August 1. Localized versions for additional countries are to follow next year.

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