Salesforce.com dismisses Microsoft hosted CRM effort

Executives from hosted CRM pioneer Salesforce.com are shrugging off Microsoft's belated entry into its core business.

In an interview Wednesday, Salesforce.com founder and CEO Marc Benioff noted that the full-feature version of Microsoft's Dynamics CRM Live service won't be available until some time next year.

Microsoft on Tuesday unveiled its long expected Dynamics CRM Live offering, which it has priced from US$39 per user per month -- far lower than Salesforce.com's low-end price of about US$65 per user per month.

"They have to deliver the product," Benioff said. "And the reality is, coming up with one that has an inferior price speaks more to the inferior quality of the technology then its competitiveness as a product. [Salesforce.com's service] isn't sold in Best Buy. It's sold by a professional services organization that delivers the right price to the customer and answers all their needs."

Nor was he worried about customers leaving Salesforce.com and heading to Microsoft to take advantage of the low price. "There is a reason why we're successful," said Benioff. "We focus on the success of every customer. We've never had a major customer leave us, and we've had amazingly low levels of customer attrition overall."

"I think that Microsoft has announced this service more often than Roger Federer has won Wimbledon," added Bruce Francis, vice president of corporate strategy at Salesforce.com, in an e-mail. "I think a clear sign of worry is a company that comes late to a market and then introduces a wan imitation of a competitor's superior product."

Microsoft's core packaged application business has faced serious challenges from upstart hosted offerings like Salesforce.com's in recent years, forcing the vendor to create the competitive service, according to industry analysts.

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