A Big Splash with One Toe

Microsoft has apparently tired of sitting on the beach, and has decided to officially enter the CRM waters. The company says it is just dipping in its toe, but make no mistake: The Redmond, Wash., software behemoth is really jumping in with both feet. All I can say is, watch out--the CRM ocean as we know it has just changed. Depending on which boat you are in, this is either good news or bad news.

First, let's review what was unveiled. Microsoft, to no one's real surprise, says it plans to release its own CRM offering targeting the small-to-midsize business (SMB) market. This market is vast and has traditionally been underrepresented, underserviced, and misunderstood. Although pricing and specific distribution schemes were not made public, I can say this spells good news for SMB customers looking for a simple, affordable, and compatible CRM solution.

The product is built on the Visual studio .Net platform and can be accessed via Outlook or the Web. According to the Microsoft spin machine, the software giant is targeting small companies. A cobranded offering in conjunction with Siebel will target companies with about 500 employees. Further, Microsoft says it will partner with Onyx, Pivotal, and SAP for enterprises.

On paper this looks like a plan--but in the marketplace this looks like a mess. It is only a matter of time before most businesses, regardless of size, will want to deal mainly with Microsoft. Many corporations are running Windows 98 or 2000, with some now evaluating XP. There is a comfort factor here. There is a compatibility factor. There is a simplicity factor. That is what IT departments are demanding from the tech industry.

On the surface, it appears Microsoft is playing nice and including as many CRM partners it can get its arms around in its plan. But this warm, fuzzy hug can easily turn into a death grip. Just ask WordPerfect, Borland, Novell, and Netscape. Take me for example. I preferred WordPerfect. I enjoyed more functionality with Notes. I broke into the Internet with Navigator. Today, I am using Windows 2000, Outlook, and Internet Explorer. I don't remember when it happened, but the fact is, one by one these applications were switched to Microsoft.

CRM is a bit more entrenched. But the point is the customer base. Once the Microsoft marketing machine begins to roll, nothing can stop it. If history is any indication, no matter what Microsoft is saying today, bit by bit the company will muscle its own CRM offering into more enterprise accounts without the help of the Siebels, Onyxs, and Pivotals if these vendors aren't careful. The key for these vendors will be account control. So watch out: Whoever interacts with the customer and is the smiling face at the end of a successful implementation will be left swimming.