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Microsoft counting on add-on tools to help sell CRM

Microsoft is depending on reseller and ISV partners to lend increased credibility and functionality to its debut CRM package.

Microsoft Corp. is leaning on its extensive array of channel partners to increase the functionality of its debut CRM offering with add-on software.

Long known for its clout among resellers and independent software vendors (ISVs), Redmond, Wash.-based Microsoft is depending on partners to help fill gaps evident in version 1.0 of its CRM application set. From regional distributors to well-known software makers, Microsoft channel partners are already attempting to woo CRM customers.

Microsoft CRM was released in January and already has 1,000 channel partners, as well as 150 ISVs. It also has over 300 customers, according to company officials.

One company creating an add-on is Santa Clara, Calif.-based software maker Network Associates Inc. The vendor's Magic Solutions division integrated its latest help desk offering, HelpDesk IQ, with MS CRM. Microsoft is also hoping to capitalize on Network Associates' legion of channel partners to bring the joint offering to market.

The combined package adds help desk functionality for MS CRM users and improves related service management capabilities. In addition, HelpDesk IQ features self-service Web automation, inventory tracking and enhanced audit capabilities. Pricing for IQ will be $995 per named user, according to Network Associates. The product integrates out-of-the box with MS CRM.

Carlos Hidalgo, director of marketing at Magic Solutions, said Microsoft remains focused on delivering core competencies of CRM, and that HelpDesk represented one area where his company could deliver much richer features. The two companies will officially role out the combined offering in June. They have yet to sign on any official customers, Hidalgo said.

"When you're looking at companies of 500 employees or less, most have homegrown, immature IT infrastructure," Hidalgo said. "These users want something quick to implement that isn't cost-prohibitive."

Another company building around MS CRM is Watertown, Mass.-based reseller Green Beacon Solutions. Green Beacon has designed four different complimentary tools to bundle with the Microsoft package: Web lead capture, interactive organizational chart, relationship management, and forecast management. All of four systems integrate with the base MS CRM applications, automatically sharing user data throughout the system.

According to company president Ben Holtz, users won't need to pony up additional resources to bring home the new functionality. Aside from implementation fees, the tools won't cost MS CRM buyers anything extra.

"We know this is a great way for us to differentiate from other MS CRM partners, and it can help generate additional service-related revenues," Holtz said. "We didn't have to invest anything more than working hours, so it's a positive equation for us."

Holtz said the add-ons should also help Microsoft and its partners compete with CRM products from vendors such as Onyx Software Corp., in Bellevue, Wash., on the high end of the midmarket. While Green Beacon has yet to sign on any customers, Holtz said the company has several potential users in the process of reviewing bids. At least one of the prospects came to Green Beacon solely because of the additional features, he said.

Karen Smith, research director at Boston-based Aberdeen Group, said the budding relationship between Microsoft and its CRM channel partners is crucial to the platform's overall success. Since smaller businesses tend to buy IT products and services from local providers, and because they generally prefer integrated applications that lower overhead and are simple, Smith said resellers and ISVs would be responsible for establishing a reputation for MS CRM on the front lines.

Out of the gate, it will be important for Microsoft's channel partners to help bridge gaps in version 1.0 of MS CRM, she said.

"Undoubtedly, the add-ons will help bring in customers that are skeptical about overall functionality," Smith said. "It's also very important that support from Microsoft trickles down to the local level, but I think we're seeing already that they have made a significant investment in the channel."

According to Smith, Network Associates is a good example of a vendor that could become a competitor in the future, when Microsoft develops its own help desk applications. However, with its decision to partner, Microsoft wisely recognizes that it may be a long time before it can offer comparable functionality, she said.


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