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MSFT Dips Another Toe in SaaS

Microsoft  is encouraging its partners to familiarize themselves with the next version of Dynamics CRM for a number of reasons.

Code-named "Titan," the customer relationship management  application is the next generation of Dynamics CRM 3.0. Customers will be able to pick one of three deployment options for Titan: on-premise, Live CRM hosted by Microsoft, or Live CRM hosted by a third party.

But while Live CRM hosted by Microsoft is an option, the Redmond, Wash.-based software vendor thinks its customers could do with at least a little hand-holding.

It is thus encouraging partners to participate in its technology adoption program (TAP), in the hopes that they will get up to speed with the new code base before the product ships this summer.

Microsoft's thinking is that once those partners have familiarized themselves with Titan, they will be able to offer customers a bundled application set that includes CRM, whether hosted or not. And if their customer wants to go with a stand-alone Microsoft-hosted version of Live CRM, they would also be in a position to offer consulting services.

"We'll at least suggest a partner that can help [customers] be more successful," said Brad Wilson, general manager of Microsoft Dynamics CRM.

"CRM is more than a product -- it's a strategy. It helps to have the perspective of someone who has experience with that kind of application. People who do it for a living can bring a lot to the table," Wilson told internetnews.com.

That kind of experience will come in handy, Wilson said, for addressing strategic issues such as defining territories for a sales force, designing workflows for routing new leads or determining sales stages.

"People often get confused and think SaaS means there's no need to think about strategy, but you need to connect the product to the strategy."

Wilson added that most customers are likely to pick third-party hosting of Live CRM by partners specialized in their vertical markets.

Partners participating in TAP will get a head start in developing bundles and mash-ups between Live CRM and other applications, he explained.

Microsoft said that 300 partners have already signed up for TAP during the first quarter of 2007 and expects more than 1,000 to have signed up by mid-year about the time specific pricing information will be revealed.

Wilson would not provide pricing information but said that would be made available towards the end of the first half of 2007.

Initially, said Wilson, Microsoft will make the hosted CRM Live service available in North America only, but does plan to expand to other markets in the future.

Last March, Microsoft announced that Live CRM would be available for hosting by partners and last summer announced that it planned to host Live CRM on its own Windows Live servers.

While the Live CRM initiative can be seen as Microsoft's latest foray into SaaS, it may also reflect recognition that some customers may not want to own an on-premise CRM application.

"It's almost certainly a reaction to the success of Salesforce.com ," said Chris Alliegro, an analyst with Directions on Microsoft.

"Microsoft recognizes that there is a class of customer that is unwilling to take the risk or does not have the skill set to manage an on-premise CRM solution," he told internetnews.com.