Microsoft Skips CRM 2.0 to Unveil 3.0

Microsoft today revealed Microsoft CRM 3.0, bypassing the long-delayed version 2., and rounding out its CRM suite with a marketing tool and subscription-based licensing for customers seeking a hosted option. Version 3.0 is scheduled to be available to current customers in Q4 2005, and to reach general availability in Q1 2006.The company is previewing the new solution at its worldwide partner conference this week. In February Microsoft announced that the release of 2.0 would be delayed from March 2005 to the fourth quarter of this year; after talking with customers and partners, however, Microsoft decided to add more functionality based on current users' needs, according to Brad Wilson, general manager of Microsoft CRM. "We shared our 3.0 road map that much deeper integrated what [customers and partners] wanted to do. We really spent a lot of time trying to create a native Outlook experience. For people who live in Outlook, this is the easiest way you can do CRM. You don't have to leave your email." Liz Herbert, an analyst at Forrester Research, is being cautious until Microsoft CRM 3.0 debuts and customers can experience it themselves. "[Microsoft] needs to get it out to market. It will be interesting to see if they can actually hit the release date this time." Enhancing integration is a plus, however. Sheryl Kingstone, CRM program manager and industry analyst for Yankee Group, is pleased with the changes. "They've listened to what partners and resellers want. They fixed a lot of Outlook integration issues." Kingstone had been critical of the Outlook Client's lack of tight integration with version 1.2. She also applauded Microsoft for fixing performance issues. In the past, according to Kingstone, if business clients didn't have an advanced implementation strategy it could take them two hours just to synchronize the data. New to Microsoft CRM is 3.0's marketing automation module, which includes list management, campaign management, marketing resource management, and closed-loop response management. It also introduces a scheduling module, which automatically manages complex scheduling requests. In addition to tools for the traditional marketer, it allows untraditional marketers to pull together minicampaigns on the fly or better manage several email responses to a query, according to Wilson. "[Marketing's] the third piece of CRM that was missing from Microsoft," Herbert says. Version 3.0 is rounding out CRM to include sales, service, and now marketing. Herbert recognizes Microsoft's desire to cater to the SMB market by providing subscription-based licensing for customers who prefer a hosted offering. "There's a clear demand for that in the market. This will make the functionality more competitive," Herbert says. Even some vendors who don't offer pay-as-you-go services are starting to make exceptions for customers that are in the final stages of buying, but still uncertain of whether to go the hosted or on-premise route. Because hosting will be done through partners, it is not quite the same as an on-demand service like Salesforce.com, where everyone works from the same architecture--the difference is that clients wanting advanced customization capabilities have access to that, but at the cost of losing the ease of upgrade. "We want to promote a choice model," Wilson says. "We're a flexible, affordable CRM platform that's going to meet the needs of companies in the years ahead. For small and midmarket customers this is a real strong [offering]." Customers can choose to rent for a while, and then migrate to an on-premise solution, if they prefer. Wilson sees most people moving in that direction once they weigh the costs of renting verses buying. "Microsoft always has a hosted option through partners, but what they didn't have was a full-blown strategy on how to handle that," Kingstone says. "I think this is a great strategy. I fully endorse it. They're on the right path." Related articles: Microsoft's CRM Is Put On Ice, Again SMBs Are Shopping For ERP and CRM Solutions On the Scene: On Demand Is in Demand An increasing number of companies are seeking these solutions, but vendors have to prove themselves worthy.