Brad Wilson, general manager of Microsoft Dynamics CRM, made the announcement at Microsoft's annual partner conference being held this week in Boston. The CRM application will be available in the second quarter of 2007 as part of Live Service, Microsoft's initiative to host applications and deliver them via the Internet.
"This is all part of what we call the power of choice," Wilson said in a briefing last week. "This maximizes the flexibility of how people buy CRM and how they use CRM."
The release is part of Microsoft's next version of CRM, code-named "Titan," which will offer three different delivery models all based on the same code -- on-premise, partner-hosted or on-demand -- that will be hosted in Microsoft Live data centers.
"I certainly think it's going to shake up the landscape," said Liz Herbert, an analyst with Cambridge, Mass.-based Forrester Research. "Most vendors have already moved into this market, but for Microsoft, an advantage of coming in now is they can learn from the other vendors out there."
SAP just made a CRM application available in a SaaS deployment in February, and Siebel (now a part of Oracle) released Siebel OnDemand three years ago. Pure-play on-demand CRM vendors such as Salesforce.com, NetSuite and RightNow have been in the market even longer. But Microsoft's entry into on-demand CRM will help it compete against Oracle and SAP in the enterprise market, where SaaS is making inroads, particularly in smaller divisions, Herbert said. It will also help Microsoft reach further into the small and midsized businesses market.
"A lot of partners are moving up-market for larger deals and not serving smaller deals like I wish they would," Wilson said. "This creates an easy way for partners to bring on smaller deals."
Microsoft currently offers CRM on a subscription basis through its partner network, but those applications are housed in the partner's data center.
There will still be room for the partner channel with the release of Dynamics CRM Live, because Microsoft will not allow third-party code within its data center, Wilson said. While customers will still be able to create custom objects, mash ups and analytics with the SaaS CRM version, deeper industry-specific customization will be provided by partners.
"Around the world, I want to see people do deeply vertical solutions," Wilson said. "The best way to do that is to unleash the creativity of our partners. We definitely believe partner hosting is a great option."
CRM Live will be offered directly by Microsoft but promoted through the partner channel, and customers will be encouraged to engage with partners in implementations, Wilson added. CRM Live will be initially available only in North America, with no international date set so far.
The announcement comes on the heels of a good year for the CRM business, Wilson said. Microsoft CRM grew about 100% over the past fiscal year and added more than 50,000 users in the last quarter, bringing its total to more than 250,000.
Microsoft today also released a thin-client mobile CRM application that allows users to access anything in the CRM system using a wireless access protocol (WAP), Wilson said. Microsoft offered mobile CRM through synchronizing with Windows mobile devices; the new application extends it to PDAs such as BlackBerrys and even a Playstation portable.
"We're releasing this as open source in the CRM community sandbox," Wilson said. "I really like the idea of accelerating what our partners can do in a community sandbox."