Microsoft delays CRM apps

Corporate users who were hoping that Microsoft Corp. would put its promised customer relationship management applications under their Christmas trees this year are going to have to wait for a later delivery.

Microsoft recently disclosed that the version of the CRM suite for North American users, originally due to be released for manufacturing by year’s end, is being postponed to early 2003. In addition, shipment of an international version that will be localized for different countries is now being delayed from the second quarter to the second half of next year.

David Thacher, general manager of the CRM unit within the software vendor’s Microsoft Business Solutions division, downplayed the postponements and said the North American release of the CRM software is in the final stages of testing. The delay on that release will last only a matter of weeks and is being caused partly by holiday season vacations, he said.

Microsoft is addressing only a few routine bugs that were found in initial testing by users, Thacher said. He added that another round of user tests will start in early January.

Microsoft CRM is being developed from scratch and will be the company’s first full foray into that software market. The applications are being designed for companies with up to several hundred employees and are due to include a variety of CRM functions, as well as tight integration with Microsoft Office and the company’s other business applications.

Credibility at Stake

Erin Kinikin, an analyst at Giga Information Group Inc. in Cambridge, Mass., said Microsoft has to ensure that the quality of the CRM software is rock-solid or else risk losing credibility with potential users.

“If Microsoft can ship a quality release with the functionality they’ve promised by the end of January, they can probably declare victory, at least for the English-speaking world,” she said.

But the real impact of the delays is on the international release, Kinikin said, adding that Microsoft initially had set a first-quarter shipment date for that version. “Microsoft can’t even get in the game in most countries until they have a localized version,” she said.

Microsoft CRM has several shortcomings that the company needs to address, according to Cheryl Kingstone, an analyst at The Yankee Group in Boston. For example, the applications lack customization features and the ability to handle complex workflows, Kingstone said. In addition, companies that want to integrate the CRM software with Microsoft’s Great Plains and other back-office applications will have to use the vendor’s BizTalk integration server, she said.

However, a Microsoft spokesperson said the initial release of Microsoft CRM will support user interface modifications and other basic customization as well as more complex changes, such as the addition of Web services and other extra functionality. The applications also will be able to support workflow needs specific to midsize users, the spokesperson added.

Microsoft plans to bundle BizTalk Server 2002 Partner Edition with the Professional version of the CRM software for integration uses, according to the spokesperson.

The CRM and back-office applications currently require their own databases, which have to be manually synchronized, said Tom Racca, vice president of sales and marketing at NetSolutions Inc. in Westboro, Mass.

NetSolutions, which makes telecommunications equipment, has been beta-testing Microsoft CRM since August and put the software into production use by 10 end users last month, Racca said. The company also uses Microsoft’s financial and order-administration applications.

However, Racca added that Microsoft has told NetSolutions that it plans to more tightly integrate the two sets of applications. That would be a step forward, Racca said. On the plus side, the current beta-test release of the CRM software does provide users with real-time access to customer-related data, he noted.

For example, sales and support workers at NetSolutions can walk into a customer’s office, start up the client version of the software and get up-to-the-minute account data, Racca said.

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