Microsoft will open a second front in its assault on the CRM market this week with the release of Microsoft Dynamics CRM 3.0. The move signals a step beyond SMBs, with the company targeting the enterprise for the first time.

With the introduction of CRM 3.0, the Dynamics nomenclature will designate a product line that includes two business suites, ERP and CRM, according to Kevin Faulkner, senior director of product marketing at Microsoft.

Version 3.0 adds a marketing module to the existing sales force automation and service components of the suite, making it more acceptable for larger clients. The suite has also been more tightly integrated with Microsoft Outlook and Office offerings.

For example, documents and contacts in the Office and Outlook applications can automatically flow into the CRM suite if marked for inclusion.

Industry analyst Liz Herbert of Forrester Research said Microsoft's claim that integration with Outlook will shorten learning curves and make navigation flows easier is consistent with customer references contacted by Forrester.

Also appealing to enterprise-level customers is the revamped workflow engine in Version 3.0, which uses metadata so that it is more customizable with other Microsoft and non-Microsoft platforms.

The system captures the metadata and stores the information in such a way that it is available to different workflow engines, said Jan Jamrich, program manager for Microsoft CRM.

In Version 3.0, the underlying database is now capable of handling a multitenant architecture that will be critical for Microsoft's goal of selling CRM 3.0 to SaaS (software as a service) providers who will resell it in turn to their customers.

Microsoft is setting the hosted fee to SaaS providers at US$24.95 per user, allowing the SaaS provider to charge whatever they consider is the prevailing market price for the service, Faulkner said.

However, this reseller model is not really an indication that Microsoft is moving to a full SaaS offering.

"They would need to centralize the data in a datacenter for all of their customers," Herbert said.

Version 3.0 will also see improved integration with MOM (Microsoft Operations Manager), which Jamrich said will reduce cost of operations management in a hosted model.

In late 2006, the follow-on to Version 3.0, code-named Titan, will be available. Titan will further enhance the suite's multi-tenant architecture by making the Web server multi-tenant capable. Titan will also see a multilingual user interface available on a single server to allow Microsoft partners to get into the international market for CRM.

The English language version of 3.0 is available now; the Dutch, French, German and Russian versions will be available next month.

An on-premises solution is priced between US$622 and US$880 per user and US$1,244 and US$1,761 per server for the professional edition. A small business edition is priced between US$40 and US$499 per user and between US$528 and US$599 per server.