The company announced on Friday that its Dynamics CRM software will have a 'Social Networking Accelerator' component which will allow companies to monitor what customers are saying on Twitter, and to provide information about products and services based on that data.
In a Microsoft statement, Ovum analyst Warren Wilson said: "In this market, insight into what customers are saying is extremely valuable."
While starting with Twitter, Dynamics CRM will have further social-networking components added to it in future releases. Social Networking Accelerator will be available "in the next few weeks", Microsoft said.
The release lags CRM competitor Salesforce.com, which in March produced software that would integrate Twitter functionality into its Service Cloud offering. Salesforce CRM for Twitter is designed to allow companies to search, monitor and join conversations taking place on Twitter, while using Service Cloud. The Service Cloud software captures and aggregates communications on cloud platforms including Google and Facebook, allowing cloud customer services.
Microsoft faces further competition from CoTweet, a start-up web-based platform that companies can use to engage with customers on Twitter. CoTweet on Friday announced it had secured $1.1m (£700,000) in venture funding from firms including Baseline Ventures, Founders Fund, First Round Capital, SV Angel, Maples Investments and Freestyle Capital.
Microsoft also announced on Friday that it will release software to incorporate a sales information distribution component into Dynamics CRM. The 'Partner Relationship Management (PRM) Accelerator' is designed to distribute sales leads and centrally manage sales opportunities across channel partners.
In addition, Dynamics CRM will get 'Portal Integration Accelerator' software. This will have a point-and-click facility that will allow firms to extend business processes to the internet without the need for further web development.
This article was originally posted on ZDNet UK.