In-Depth

Microsoft Notches CRM Milestone

Microsoft Corp.’s first-generation customer relationship management (CRM) product may not have caught on like wildfire, but it’s certainly seen uptake in line with the software giant’s expectations.

• By Stephen Swoyer
• 10/15/2003

At its Microsoft Worldwide Partner Conference last week, Microsoft Business Solutions announced a significant milestone for CRM 1.0: 1000 corporate customer deployments in less than a year. Microsoft said more than 1,500 CRM partners have also signed on to resell CRM 1.0, and that 300 ISVs are building applications designed to exploit CRM 1.0.

Microsoft introduced the product in January 2003. It’s available in two main versions: Microsoft CRM Professional Edition and Microsoft CRM Standard Edition. The former supports CRM functionality such as workflow rules, customization, and back-office integration with ERP systems; the latter is positioned for customer environments without extensive business automation and integration requirements. Both offer basic sales force automation and customer service functionality that, most analysts say, is a generation or two behind competitive offerings.

That could change when Microsoft ships CRM 1.2 at the end of the year. Because the software giant has adroitly enlisted support from resellers and ISVs, analysts say that the software giant’s nascent CRM product is poised to become a serious contender in the small and medium enterprise (SME) space. “In less than a year since the first version of its CRM solution was introduced, Microsoft Business Solutions is quickly becoming a serious contender in the SME CRM applications market,” confirms Kelly Spang Ferguson, principal CRM analyst with research firm Current Analysis.

Indeed, Microsoft has worked aggressively to build its reseller and ISV partner networks since introducing CRM 1.0 several months ago. Last February, Spang Ferguson notes, the software giant touted support from 850 resellers and about 100 ISVs. “[T]he growth of its customers, resellers, and ISVs validates its ability to build an ecosystem,” she writes, conceding that Microsoft “is just getting started in terms of its ambitions to penetrate the SME market internationally.”

Microsoft’s CRM 1.2 in the international release of the product, and will boast improved reporting with Crystal Decisions’ (now Business Objects’) flagship Crystal Enterprise 9 reporting suite; compatibility with Windows Server 2003 and Exchange Server; and an enhanced development environment for Microsoft’s Outlook client, among other features. The bottom line, says Spang Ferguson, is that Microsoft CRM has emerged as a viable threat to more established—and in most cases, more feature-rich—competitive offerings. “Microsoft is creating momentum that will be difficult for competitors to derail, considering that in less than a year Microsoft Business Solutions has more customers than some CRM competitors have acquired in their existence,” she concludes.