Microsoft officially kicks off mid-market CRM tool

Depending on who you ask, Redmond, Wash.-based Microsoft Corp.’s dive into the customer relationship management (CRM) market will cause either a splash or a ripple.

Geared specifically toward the small and medium business (SMB) market – organizations with fewer than 500 workers – the company’s Business Solutions unit officially kicked off its CRM product last Thursday at an event in downtown Toronto. Dubbed Microsoft Business Solutions Customer Relationship Management, the application is built on Microsoft’s .NET infrastructure.

At the launch, Microsoft Canada Co. President Frank Clegg focused on selling the offering as a business process rather than a technology. CRM in recent years has become vital but enterprises have had difficulties actually defining CRM and implementing a successful strategy, Clegg said. The first-generation offering – built from the ground up and the first business product since acquiring enterprise resource planning (ERP) vendors Great Plains in 2001 and Navision last year – targets salesforce automation, including forecasting, lead and contact management.

It’s not about feeds and speeds, Clegg said, adding that the CRM market has been littered with failed CRM implementations and product complexity. Available now, the offering requires Windows 2000, SQL Server, Internet Explorer 5.5 and Active Directory. Pricing starts at $595 per user, with an additional $1,945 for the Standard Edition and $2,990 for the Professional Suite Edition. Microsoft said Microsoft CRM does not need a client-side installation and can be accessible both as a browser-based application and via Microsoft Outlook, adding that the solution can either be hosted through certified resellers or offered as an on-premise tool.

Toronto-based Customer Relationship Management Association of Canada (CRMA) President Laura Pollard echoed Clegg’s statement, trotting out data from its joint study with Microsoft showing failed CRM implementations in Canada was in the neighbourhood of 60 per cent. Pollard said this is due to lack of enterprise-level planning and the failure to shift to “customer facing” business processes.

Warren Spitz, CEO for Toronto-based specialty lumber product distributor UCS Forest Group, is an early user of Microsoft CRM. Initially a Great Plains ERP customer, the company needed an integrated CRM tool for its inventory database and interactions with both vendors and customers.

“CRM is a logical extension of the database that we have as a tool to manage that information and make it readily accessible,” Spitz said. In terms of measuring ROI, Spitz noted that the company has had prior failed implementations. “This is our third attempt at CRM,” Spitz said, adding the issues at hand were integration, scalability, usability and compatibility with existing infrastructure and data.

“We’ve tackled the puzzle by layering the MS CRM on top of our Great Plain system, which means that all of the information is seamless and accessible – now the issue is simply using it,” Spitz said.

According to Gartner Inc., Microsoft is entering a stagnant CRM software market. Recent figures from the Stamford, Conn. research firm show the worldwide CRM sales dipped from US$3.7 billion to US$3 billion in 2002 and will remain flat in 2003.

Time will tell, according to Jacob Abramowicz, senior research analyst at Toronto-based E-Search Canada, if Microsoft manages to make any impact into a flagging CRM market. It’s a pretty simple solution that’s coming into a pretty weak market, Abramowicz noted. “It might spark interest but then again it’s a matter of looking but not buying. I hope they don’t have their expectations too high in the short term – it’s just not something that’s going to immediately make a splash.”

In Microsoft’s favour is that it is targeting the Canadian mid-market, which has typically had no clear vendor leader – it’s a good idea for them to go into this market first, he added. High-end CRM vendors including SAP AG, Oracle, Siebel Systems Inc. and PeopleSoft Inc. won’t feel any pressure from Microsoft’s strategy, at least in the short term. “They’re going for a market where 90 per cent are already running Windows and already integrated with Outlook and Excel,” Abramowicz said.

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