Analyst: Microsoft CRM not after big boys

Microsoft's customer relationship management software may not be feature-rich, but product isn't targeted at major competitors anyway, says Springboard analyst.

Features-wise, Microsoft Dynamics CRM may not be as robust as its bigger competitors, but to judge it on that front may be missing the point altogether, says a Springboard 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 angles Microsoft's offering effectively at the SMB (small and midsize business) 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 SMBs, a full CRM suite may not be on their buy list in the first place.

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

He offered of a scenario where Microsoft's CRM may not be sufficient. Barnes said, 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 Microsoft is targeting CRM at a broader audience compared to its competitors' products.

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

"But what most people do is fire up Outlook for their e-mail 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, he said, adding that widespread CRM use cannot be implemented top-down but needs to appeal to a broader audience.

Close to half of Microsoft's CRM business in the region comes from SMBs, many of whom use portions of CRM functionality in their operations, said Chopra.

He 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'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.

With many of them located in the region, Chopra said they are in tune with niche needs of customers.

Microsoft released Dynamics CRM 4.0 in December last year.