Analyst: Microsoft aiming Dynamics CRM at SMEs

Springboard Research claims Microsoft's CRM tool may be insufficient for larger companies, but meets smaller enterprises' needs well

In terms of features, Microsoft Dynamics CRM may not be as robust as its larger competitors, but to judge it on that front may be missing the point altogether, according to a Springboard Research analyst.

Microsoft's CRM (customer relationship management) product's strength is in its familiar interface and integration with the rest of the software giant's office applications suite, said Michael Barnes, vice president of software and Asia-Pacific research at Springboard Research, in an interview.

Barnes said Microsoft's approach to CRM is from the "contact and collaboration perspective, via Outlook and Exchange... Instead of treating CRM as a distinct set of functions packaged as a separate application".

This aims Microsoft's offering effectively at the SME segment, because such companies may only require several CRM functions, with workers operating mainly within Outlook for most tasks, said Barnes.

"For many of these companies, most communications and scheduling is performed in Outlook. Since CRM is how you deal with contacts, that should be done through the same interface," said Barnes, adding that for many SMEs, a full CRM suite may not be on their to-buy list in the first place.

For specialised functions and larger companies, Microsoft's CRM may, therefore, prove insufficient, noted Barnes.

Suggesting a scenario where Microsoft's CRM may not be sufficient, Barnes said that, generally, Outlook is not the tool of choice for helpdesks, so Microsoft CRM may not be the choice for larger companies which may want to route call inquiries directly to a sales force automation system.

Manish Chopra, Asia-Pacific marketing director for Microsoft's Dynamics products, said in an interview that Microsoft is targeting CRM at a broader audience than its competitors' products.

According to Chopra, about 15 percent of the employees in large organisations are licensed to use CRM software, with half of that segment actually using it.

"But what most people do is fire up Outlook for their email first thing in the morning... the level of integration with Outlook is what appeals to people," said Chopra.

Microsoft's competitors generally sell to the marketing or finance chiefs of a company but not the IT people, Chopra said, adding that widespread CRM use cannot be implemented from the top down but needs to appeal to a broader audience.

Chopra said: "Many customers use CRM but may not call it CRM in the first place; it could be 'vendor management' or 'loyalty management', but it uses CRM tools."

On the threat posed by competitor Salesforce.com's extensive third-party applications network, termed "AppExchange", Chopra said Microsoft's own network of ISVs (independent software vendors) are similarly building applications to suit customers' varied needs.

Microsoft released Dynamics CRM 4.0 in December last year.