The new product, Microsoft Customer Relationship Management Solution, will include account and contact management, lead management, and activity and task management, as well as calendar and business-management functionality. In addition, it will come with a sales-force-automation application for creating product catalogs, quotes, orders, direct E-mails, and sales literature and will have opportunity-management capabilities. The customer-service module will help manage contracts and E-mail correspondence, as well as service requests. A customer portal will provide access to sales and support information and can be used in conjunction with the customer-service capabilities for online chat.
The applications are built on the .Net Framework, which is part of Visual Studio .Net. That will let third-party providers enhance the applications by providing Web services using .Net APIs, Simple Object Access Protocol, and XML, according to Microsoft.
Microsoft already offers bCentral Customer Manager, an online lead-management service for small businesses, and eEnterprise Field Service for medium-sized companies in the high-tech industry. In addition, its Great Plains division has been selling Siebel System Inc.'s Front Office, a co-branded integrated application suite for medium-sized companies that's based on Siebel's MidMarket application suite. Microsoft has partnered with other midmarket CRM providers such as Pivotal Corp. Pivotal, and its rival Onyx Software Corp., say the new Microsoft offering won't affect their relationships with Microsoft. The product, they say, is geared toward the smaller end of the small and medium-sized business market segment.
While vendors such as Siebel, PeopleSoft, and Pivotal won't directly compete with the new CRM application, they're likely to feel the impact of Microsoft's longer-term strategy of offering a variety of Web services, according to Christopher Fletcher, VP and research director for Aberdeen Group Inc. "What they're doing is fundamentally changing the rules of CRM and the way businesses will interact with customers," says Fletcher. The Web-services strategy will be attractive to businesses that won't want to deploy expensive, labor-intensive CRM suites and will opt instead for a Web-services model that will allow them to get the functionality they need without huge implementation costs, he says.
The small and medium-sized market is largely untapped. "Microsoft could potentially dominate the lower end of the market," he says.
The new CRM application will be accessible from Microsoft Outlook and the Web and will be sold as both a packaged application and a hosted service. Pricing hasn't been released. The North American product isn't expected to be available until the fourth quarter of this year. International versions will be available in the first quarter of 2003.