In-Depth

Microsoft Previews Next-Gen CRM Release

Microsoft says CRM 3.0 will help drive end user adoption and reduce TCO

• By Stephen Swoyer
• 07/13/2005

Last week, Microsoft Corp.’s CRM 3.0 suite inched closer to reality, with previews of the long-awaited release at the company’s TechEd 2005 conference in Europe and Worldwide Partner Conference 2005 in the U.S.

Microsoft says CRM 3.0 addresses three main customer pain points: driving user adoption, ensuring business fit, and reducing TCO.

According to analysts, Microsoft now fields a formidable CRM entry—albeit one that’s distinguished not so much by the depth of its features or the breadth of its coverage but by its reception among customers and resellers. To date, the software giant has enlisted more than 1,600 customers, with an average deployment of 25 seats. Of course, some customers—such as H&R Block, with 1,500 users—are supporting far more.

In its first full year as a CRM vendor (2003), Microsoft generated more revenue than hosted CRM luminary Salesforce.com, according to AMR Research: The company netted $148 million in CRM revenue that year, while Salesforce.com pulled in less than half of that ($71 million). Last October, AMR projected that Microsoft would grow its CRM revenues by 40 percent in 2004—almost double the researcher’s projections for Salesforce.com (21 percent).

The upshot, according to Ian Jacobs, a principal CRM analyst with consultancy Current Analysis Inc., is that Microsoft has become a force to be reckoned with in the worldwide small- and medium-enterprise (SME) space.

“While MBS is still new to the CRM market, this has not hindered the company’s ability to penetrate a market that has been inconsistent in sales growth,” he says. “[T]he rate at which MBS is building an ecosystem of resellers and ISVs is indicative of a major advantage that Microsoft CRM has against all of its competitors—its affiliation with the Microsoft brand.”

With CRM 3.0, Microsoft obviously hopes to keep the momentum going. Redmond says it’s redesigned the Outlook-client and Web-client interfaces to provide a look and feel that’s more consistent with other Microsoft products.

On top of this, CRM 3.0 ships with pre-built reports and views that promise to give customers quick instant visibility into trends and issues. What’s more, users will also be able to export CRM data directly into Microsoft Excel for online or offline analysis.

The next version of Microsoft CRM should also be more mobility-friendly, with a new engine for role-based synchronization of laptop data as well as an improved client for Microsoft Windows Mobile. Microsoft is also rounding out its CRM suite, which has thus far lacked a marketing automation module for list management, campaign management, marketing resource management and closed-loop response management. In addition, CRM 3.0 introduces a new service-scheduling module that automatically manages scheduling requests that (in the current release) require specific people, skills, and resources.

Microsoft also plans to introduce a Small Business Edition designed for small businesses that use Windows Small Business Server 2003 Premium Edition. At this point, Microsoft expects CRM 3.0 to ship sometime in the first quarter of 2006.