On the heels of closing its purchase of business-applications software
company Navision, Microsoft
gave a sneak peek at its much-t
alked-about customer relationship management (CRM) software due for
release later this year.
Speaking at the Silicon Valley Speaker series in Mountain View, Calif.,
Microsoft’s general manager for CRM, David Thatcher, said Microsoft would
aggressively target the mid-market through the software giant’s tremendous
reach and an affordable price tag.
“This is a market that is largely underserved today, which creates a
compelling opportunity for Microsoft and our partners to combine our
collective experience and expertise in both CRM and the medium-sized to
small-business marketplace,” Thatcher said.
Microsoft CRM will be the first business application built on .Net
technology, the company’s ambitious plan to rule the Web services roost.
Customers would be able to use Microsoft CRM through Outlook or another
The company said the .Net foundation would allow customers to interweave
their systems for checking credit, tracking sales leads, and streamlining
To further lure small-to medium-sized businesses to try CRM as a way to
boost sales, Microsoft unveiled aggressive pricing plans, which begin at
$395 per user plus $995 for the server. The professional suite costs $1,395
per user and $1,990 for the server.
Microsoft hopes to cash in on what it sees as a huge market selling CRM to
the many mid-sized businesses that do not currently use the software.
According to research by Gartner, as little as 2 percent of small businesses
and 20 percent of medium-sized businesses use CRM.
Researcher IDC expects the worldwide CRM market to grow at a brisk 18.9
percent annual clip, reaching $45.6 billion in 2006.
The enthusiastic entry of Microsoft into the market is sure to send shudders
down the spines of those in the space, including FrontRange Solutions,
Upshot.com, and SalesForce.com.
Microsoft CRM is set for North American release in the fourth quarter. The
company said it would initially be sold as a standalone product, but also
integrated with a variety of Great Plains business applications, such as
Dynamics, Solomon, and eEnterprise. In the future, Microsoft plans to
integrate the CRM product with Navision’s Attain and Axapta.
When it is released, Microsoft’s CRM product will be the culmination of
two years of building a business-applications unit. In December 2000,
Microsoft shelled out $1.1 billion in stock to buy Great Plains Software, a Fargo,
N.D.-based enterprise-software company.
Microsoft’s $1.45 billion cash-and-stock purchase of Navision, the
fifth-largest enterprise resource planning company in Europe, is meant to
compliment Great Plains’ domestic strength. Both Great Plains and Navision,
which will operate in the Microsoft Business Solutions unit, target small-to