Microsoft on Tuesday announced plans to release Microsoft Dynamics CRM 2013 for both on-premises and online deployment this fall. The company emphasized the app's ability to personalize both customer engagement and CRM-user experiences. But last week's Salesforce.com-Oracle alliance has shed light on Dynamics CRM's secret weapon in a cloud-crazed market: the on-premises deployment option.

"Dynamics CRM beat out Salesforce on more deals [last year] because there was an on-premises option," said Constellation Research analyst Ray Wang during a Monday conference call exploring the implications of the Salesforce.com-Oracle partnership. "Despite all the talk about the cloud, Microsoft still sells more Dynamics deployments on premises than on cloud."

Indeed, Microsoft executives detailing plans for Dynamics CRM 2013 indicated on-premises deployment, as well as online delivery, will be crucial for the release, which is expected in both deployment modes sometime in October.

"This is our first major new on-premises release after Dynamics CRM 2011, and we believe the adoption by on-premises customers is going to be huge," said Jujhar Singh, general manager of Dynamics CRM program management, in an interview with InformationWeek.

[ Want more on Salesforce.com's big shift? Read Salesforce 'Betrayal' Seen Sparking Private-Cloud Moves. ]

One reason Microsoft anticipates a wave of adoption with CRM 2013 is improved integration of the MarketingPilot marketing resource management platform Microsoft acquired in October. An optional offering to CRM customers, MarketingPilot supports marketing planning (including digital asset management, budget management, and creative and project management), cross-channel marketing (with marketing analytics and dashboards for email, social and traditional print, direct mail, TV and radio campaigns), and campaign automation (with behavior analysis against keyword buys, email response and trade show leads).

"The existing connector for MarketingPilot, which we are improving and extending, is going to be much more easily adopted with CRM 2013," said Singh.

Taking a mobile-first approach with CRM 2013, Microsoft will launch the app with new native-app support for Windows 8 and Apple iPad tablets. Soon after the release Microsoft is promising new touch-optimized smartphone apps for Windows 8, Android and iOS. The tablet apps will include a role-tailored sales application with client-side charting and dashboarding. The smartphone apps will support integrated calling and all of the above will have options for disconnected operation.

To improve internal usability (on PCs or mobile devices), CRM 2013 includes built-in customizable business processes, including lead-to-opportunity nurturing and service case management. These processes can be configured with rules and stage gates, so certain conditions must be met before you move on to the next steps. Processes also can be personalized for specific customers or groups with custom entities, and custom processes are sharable so they can become repeatable.

"We've invested quite a lot on business process excellence, so it's way ahead of the previous release and our competition," Singh said.

Microsoft's 2012 acquisition of Yammer, now a part of Microsoft Office, brings yet another improvement to Dynamics CRM 2013, with that platform's collaboration capabilities embedded directly into the CRM application. Dynamics CRM 2013 will also have outbound connectivity for Microsoft's Lync and Skype communications options. A separate license for Yammer Enterprise is still required, but at $3 per user, per month, the costs are far below what any competitive product would be, according to Fred Studer, general manager, Microsoft Dynamics marketing.

Microsoft Dynamics is still catching up to Salesforce, which was recently declared the CRM market leader by Gartner. But given Microsoft's successes with its hybrid cloud-and-on-premises approach with Dynamics, Wang speculated that the new Oracle partnership may open the door to Salesforce.com support for private-cloud deployments (hosted by Salesforce or perhaps even on-premises in customer data centers). That's just speculation, as Salesforce has not announced any changes in its cloud-only philosophy, but it would certainly change the complexion of the competition between the two leading CRM vendors.

For now, expect Dynamics CRM 2013, with boosts from MarketingPilot, Yammer, new mobile apps and new business processes, to ratchet up the current competitive landscape starting this fall.