MS Dynamics CRM Pro to start at $39 per month

Microsoft Corp. announced today the general availability of the software-as-a-service version of its Microsoft Dynamics CRM product, which, said one analyst, is an attempt to suck businesses in to migrating to the on-premise version.

Bill Patterson, director of Microsoft Dynamics CRM Online product management, said that the new product—previously announced at the Convergence conference last month—introduces a full suite of CRM functionality for the online buyer.

The product has the same functionality as the on-premise product, Microsoft Dynamics CRM 4.0, and has sales automation, marketing management and customer workflows that will benefit mobile workers and those looking for a familiar Web interface, said Frank Falcone, a senior product manager with Microsoft Canada.

One of the key, customer-driven selling points of the online version, said Patterson, is that the different versions—on-premise, solution provider, and online—all have the same code base, making it easy for customers and partners to migrate between them.

Pricing has been lowered for 2008. The introductory price for the Professional Edition is $39 Canadian per user per month during 2008. This will go up to the regular price of $44 per user per month next year. The Professional Plus version will go for $59 per user per month, and will offer more offline capabilities, data storage, configuration, and workflows.

According to Tim Hickernell, an Info-Tech Research Group lead analyst, the pricing, combined with a lacking feature set, combines to make an “on-boarding strategy” to get businesses hooked on what Microsoft is selling.

“I was underwhelmed by the pricing. It’s limited to 100 entities, which is awfully small. And even Professional Plus, you can only go up to 200 entities,” Hickernell said.

Hickernell quizzed Microsoft on the price-points of buying more entities, but the company was unable, by press time, to provide him with an answer, leading Hickernell to surmise that it was possible that the product was not designed for more entities, leaving users with one alternative—more Microsoft.

Said Hickernell: “If they were a company just starting up and this was their offering, it would not be competitive in the marketplace. So it’s a good thing that there’s this upgrade path so that they can get users off this and go to an on-premise solution. It’s a valid question (as to whether this product is bait for a Dynamics CRM on-premise upgrade. They say, ‘We’re confident that you’ll like what you see, and we have a great network of solutions providers waiting to help you.’”

CRM 4.0 also has plenty of triggerpoints with SharePoint and Office, he said, making it even more attractive for those hooked on CRM Online to migrate to the full meal deal. In the end, said Hickernell, the standalone product could greatly benefit very small organizations. So it’s not bait-and-switch, technically, but, he said, if a company grows at all, they’ll have to grow into on-premise. Said Hickernell: “That’s Microsoft!”

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