Microsoft CRM Gets Early Debut

Microsoft on Tuesday plunged into a new software pond—and laid the rumors to rest—when it officially announced plans to field a customer relationship management suite.

Microsoft unveiled its CRM strategy a couple of weeks earlier than it had told third-party resellers. Last week, software distributors told Baseline that Microsoft executives had said the company would take the wraps off the suite, known internally as MSCRM, at the Great Plains Convergence customer conference in Orlando in mid-March.

Microsoft bought Great Plains Software for $1.1 billion in late December 1999. At that time, said it planned to expand the family of Great Plains’ accounting and small-business offerings over time.

On Tuesday, Microsoft sent an e-mail note to many of its current Great Plains reseller partners, assuring them that Microsoft plans to sell its CRM suite through them, and not directly to customers. Microsoft told its resellers than it will begin in April to authorize resellers to sell its CRM suite; training on the suite is slated to begin this summer, partners said.

Microsoft’s original MSCRM plans called for the company to offer multiple versions of MSCRM, including one hosted by Microsoft that would be available via the Web on a per-month/per-user basis. Now, Microsoft says it plans to sell MSCRM exclusively as an “on-premise” solution that will run at the customer’s site and leave the provision of any kind of hosted version of the suite to third-party application service providers.

“CRM has been sold to the enterprise but not to the mid-market,” says David Thatcher, general manager of Microsoft CRM. “We’re dealing with a part of the market that has not been touched.”

Thatcher says Microsoft on Monday began installing pilot versions of its pre-beta code at some of its reseller partners. He declined to say when Microsoft might demonstrate MSCRM publicly. However, some attendees of the Great Plains partner conference last December said they saw early prototypes of the MSCRM code.

Microsoft declined to specify pricing or a release date, other than to say it plans to ship the first version of its CRM solution in the fourth calendar quarter of this year. Beta testing of the suite is slated to commence this summer, according to reseller partners.

Refuting earlier rumors about MSCRM’s support for .NET, Microsoft executives said the first version of its CRM suite already will be built atop Microsoft’s software-as-a-service framework. Some Microsoft partners said they were dubious the company could deliver a fully .NET-enabled suite by the end of the year, although they said they expect Microsoft will develop such a suite using its newly released Visual Studio .NET tools.

Microsoft also adamantly denied that it has any designs on selling its CRM suite to large customers or into markets targeted by its software vendor partners, such as Siebel Systems. But industry watchers said they would be surprised if Microsoft didn’t push MSCRM upstream over time, as the company has done with a number of its other software offerings, ranging from Windows to SQL Server.

Mid-market CRM vendors were cautious in their initial reaction to the news. Onyx Software immediately issued a statement on Tuesday, claiming it didn’t expect its business to suffer as a result of Microsoft’s entry into the space. Microsoft at one time had considered buying its way into CRM by purchasing Onyx or Pivotal, sources said.