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Microsoft commits to enterprise, CRM, SaaS

In his Convergence keynote address, CEO Steve Ballmer pledged that Microsoft is serious about CRM and enterprise applications -- and hinted at on-demand ERP.

ORLANDO -- Microsoft CEO Steve Ballmer took a break from Yahoo! acquisition talks yesterday to deliver the keynote at the company's Convergence conference, affirming Microsoft's commitment to business applications -- and the enterprise.

"The biggest decision I made -- unless we close this Yahoo! deal -- is getting into the business applications business," Ballmer told the 9,500 attendees at the conference.

Microsoft is already the leading supplier of enterprise software in total dollar volume, Ballmer said. The company got another boost today with a partnership with EDS, the IT services giant, and a major global call center and CRM outsourcer. EDS is incorporating Microsoft Dynamics CRM as a key offering of its global CRM practice, and the alliance includes joint solution development, marketing and sales.

"We probably manage more Microsoft software than any other company in the world -- over 3 million desktops and 100,000 servers," said Ronald Rittenmeyer, chairman, president and CEO of EDS. "We watched Microsoft for a long time in this space. We think the product is excellent. It's matured, it's enterprise grade, it's flexible, it's scalable and -- most important to us -- it's easy to implement."

As with EDS, CRM may be the way Microsoft gets into larger enterprises. @49056

"They see CRM as a market they can target in the enterprise," said Ray Wang, analyst with Cambridge, Mass.-based Forrester Research Inc.

Microsoft released version 4.0 of its Dynamics CRM product just before the end of the year and is set to release CRM Live, its Software as a Service (SaaS) offering, before the end of June. There are 500 customers beta-testing the SaaS application.

While enterprise software vendors like SAP and Oracle have focused recently on integrating CRM and back-office functions into one platform, Microsoft has work ahead in bringing together its CRM application and its assortment of ERP products, which include Dynamics GP (Great Plains), Dynamics NAV (Navision), Dynamics AX (Axapta) and Dynamics SL (Solomon).

"With every software company, when they started, CRM was a standalone product -- with Oracle, with SAP early on, and obviously with Siebel," Wang said. "With the new management team in place [at Microsoft], they're really looking at cross-integrations we wouldn't have seen in the past. Five years after all these acquisitions, there's a bigger commitment than I've ever seen."

Microsoft is also committing to multiple deployment models: on-premise, partner-hosted and hosted by Microsoft in the SaaS model. That goes for future iterations of ERP as well.

"We need one technology platform and a consistent set of applications that move in this direction, and we're absolutely committed to move in that direction with all our 200 partners hosting Dynamics solutions in the cloud," Ballmer said. "Expect to see more from ERP and other areas as we move forward."

Ballmer acknowledged that there are areas where businesses will turn to companies like SAP for larger deployments, and there Microsoft has partnered with SAP to create Duet, integrating SAP and Microsoft Office tools. But in smaller divisions, with specific processes, it may be easier to take Dynamics AX and customize it, rather than force it into SAP.

Microsoft is also offering a series of online services that extend existing CRM and ERP applications to the Web. The initial offering includes a fraud-prevention service from PayPal and Chase Paymentech; a marketplace service that integrates with eBay, allowing customers to sell through the popular online marketplace, as well as through their own online stores; and a keyword marketing service that includes campaign management and tracking for search-engine campaigns.

Ballmer on Salesforce.com, Siebel

In addition, Microsoft, a longtime user of Siebel and Clarify, is moving its sales force to Microsoft CRM, with 4,000 employees already making the transition and the rest due to be moved this year.

Ballmer also outlined where he sees the differences with Salesforce.com.

"They are only available online, while we give you flexibility as to how you want to implement," he said. "Almost all CRM processes are customized in some way, and the customizability in Microsoft CRM is unparalleled. Plus, we have a cloud-based implementation for half their price. Price is absolutely an advantage for Microsoft."

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