Microsoft Targets Salesforce and Oracle

If you can’t beat ’em, try to undercut them. That’s what Microsoft appears to be doing with the new prices rolled out this week for its hosted software offerings for IT shops.

Earlier in the week Microsoft (NASDAQ: MSFT) announced price cuts for two of its online “software-plus-services” offerings, meant to both woo customers away from competing SaaS services as well as to popularize its online offerings.

Microsoft announced a service update to its Dynamics CRM Online service offering that includes no-cost mobile access, additional data import capabilities, and customizable views, along with “simplified pricing,” according to a Microsoft statement.

How simplified? For customers of Salesforce.com (NYSE: CRM) and Oracle (NASDAQ: ORCL) CRM On Demand, that would be six months for free for switching, on top of a free 30-day trial period for a total of seven months. Customers have until December 31 to sign up.

After the trial period expires, the cost for a 12-month contract will run $44 per user per month, according to a Microsoft statement.

The company’s second pricing ploy appears to be a response targeted to head off any more debacles like last week’s loss to Google in a bid to provide the city of Los Angeles with hosted e-mail and other services, such as Google Apps, for some 30,000 users.

It comes as no real surprise, then, that late Monday the software giant cut the price for using its Business Productivity Online Suite (BPOS) by a third, bringing the price down from $15 per user to only $10.

The BPOS includes Microsoft Exchange Online, Microsoft SharePoint Online, Microsoft Office Communications Online, and Office Live Meeting, which provide e-mail, contacts, and calendaring, online collaboration, instant messaging, and Web conferencing capabilities. Microsoft also just increased the amount of online storage to 25GB.

However, a Microsoft spokesperson told InternetNews.com the moves had nothing to do with the loss to Google.

“We are achieving new levels of efficiency in our operations, and therefore, are able to lower prices for customers. Further, we know, from operating Exchange 2010 as a service for millions of students today, that we can anticipate significant efficiencies as we upgrade our cloud services,” the spokesperson said.

Microsoft also announced several new customers for BPOS, including Aon Corp., Hofstra University, Lions Gate Entertainment, McDonald’s, Rexel Group, the Swedish Red Cross, and the University System of Ohio.

Attempts to contact Google and Salesforce regarding Microsoft’s aggressive pricing moves were unsuccessful at press time.