BOSTON--Microsoft will host a new flavor of its Dynamics CRM software next year, in a bid to expand its footprint in on-demand customer relationship management (CRM).
"This is the single most inevitable announcement in the history of Microsoft," said Microsoft CEO Steve Ballmer during its global partner conference held here. Despite the "fantastic momentum" that Dynamics CRM has seen in the market, Microsoft is not resting on its laurels, Ballmer said.
Dubbed Dynamics CRM Live and to be hosted at Microsoft's own data centers, the product is built on the same code base as Microsoft's existing on-premise and partner-hosted CRM product. This gives businesses the flexibility to move from one form of CRM implementation to another easily, said Brad Wilson, Microsoft's general manager of CRM.
Kevin Faulkner, product marketing director of Microsoft Dynamics CRM, said Microsoft's partner-hosted CRM will continue to serve large and midsize businesses which require highly-customized offerings.
Dynamics CRM has grown so popular that Microsoft partners are running out of capacity, he added.
Although Dynamics CRM Live caters to organizations of all sizes, Faulkner said, "initial marketing dollars" will be targeted at small businesses. "The low-end market is underserved today," he explained.
Microsoft's CRM revenues grew by more than 100 percent in fiscal year 2006 ended Jun. 30, 2006, according to Faulkner. The company claims to have more than 7,500 CRM customers worldwide.
Microsoft's latest move pits itself against others in the on-demand CRM space such as Salesforce.com, which pioneered that market in 1999. Software giants SAP and Oracle have also made inroads in the market with their respective offerings.
Jeffrey Kaplan, managing director of THINKStrategies, a U.S-based consultancy, told ZDNet Asia that "Microsoft's new CRM Live product clearly shows that the company recognizes the importance of establishing a Web-based alternative to its traditional packaged software to keep pace with the rapid growth of the SaaS (software as a service) marketplace."
Currently, Dynamics CRM is completing its international language rollout. The product was launched in China in May, and will debut in Japan this quarter, according to Microsoft.
The software giant also confirmed plans to release new Microsoft BizTalk Server-based integration features this quarter, which will connect Dynamics CRM to enterprise resource planning (ERP) and CRM applications from other vendors such as SAP and Oracle.
During a demonstration, Microsoft showed off several features including dashboards with sales charts, as well as integration with existing Microsoft products and services such as Virtual Earth. For instance, a real estate agent would be able to view the sales status of properties presented on a Virtual Earth map.
Mike Snyder, principal for Microsoft CRM reseller Sonoma Partners, said: "Microsoft Dynamics CRM allows us to deliver CRM solutions that our customers rely on to provide consistently superior service to their customers."
"The new Microsoft CRM Live service will give us even more flexibility in how we address our customers' business and IT requirements," he added.
According to analyst firm IDC, worldwide spending on SaaS will grow at a compound annual growth rate of 21 percent over the next few years to top US$10.7 billion in 2009.
ZDNet Asia's Aaron Tan reported from Boston.