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Microsoft's 'Titan' CRM 4.0 Poised To Challenge Salesforce.com

Microsoft released the software to manufacturing last month, and resellers are working with customers to get it up and running as a subscription service.
Salesforce.com is well aware of the growing competition, but maintains that the major fault of those offerings is they weren't designed from the ground up to work like as an online service. Something as simple as requiring customers to run upgrade wizards shows how CRM 4.0 is more like traditional software than a service, says Peter Coffee, director of platform intelligence at Salesforce.com.

"Our customers never see any ripples or dips in an upgrade process, because the system was architected from the bottom up to deliver a completely transparent model," he said. By comparison, Amazon.com or Google wouldn't ask users to run an upgrade wizard if the company upgraded its server software over the weekend. When it comes to an online service, "users shouldn't settle for anything less in terms of convenience," he said.

Coffee also predicts that customization problems will arise for customers of on-demand software sold by traditional software vendors. The Salesforce.com approach is to treat customization as metadata; any custom code is compiled in an intermediate form and runs under the control of Salesforce.com's code. The Salesforce.com system, in fact, can recognize any problems with custom code and sends automated e-mails to developers about any problems. "We began from the notion that customization should be a species of metadata rather than being this hazardous and brittle modification of software code," Coffee said. "We can deliver full customization without the breakage opportunities, and without the cost of the upgrade conversion," he said.

Coffee, meanwhile, added that Microsoft's claim to be able to support 25 customers on one instance of its software is still just proof of concept. Pointing out that Salesforce.com has 38,000 customers, Microsoft's beta of 600 customers "doesn't seem a very valid user test," Coffee said. "Multi-tenancy isn't package choice; it's architectural, fundamental decision that's at the core of everything we do in terms of how we create and deliver capabilities."

Regarding cost, Salesforce.com CEO Marc Benioff has maintained that you get what you pay for. The potential for success with Microsoft CRM 4.0, it seems, lies in whether Microsoft can deliver that magic combo of easy customization, ease of use, and low cost as it expands the offering beyond its initial base of 600 testers.