Microsoft furthers push toward CRM

One year after acquiring Great Plains Software Inc., Microsoft Corp. is tying the CRM (customer relationship management) applications together with its bCentral small-business hosted applications, releasing a .Net-enabled version of bCentral and aiming to provide small and mid-size businesses with alternatives to the traditional large CRM packages.

"Are we interested in CRM? Yes," said Nigel Burton, general manager of marketing for bCentral, at Redmond, Wash.-based Microsoft. "We've made a concerted decision that we're not going for the large enterprise. I would not expect us to do as much at the 5,000 [employee] level as at the 100 [employee] level."

Instead, Microsoft will impart the same patient methodology it has used with its other products of starting small and growing the technology over time to work its way higher into the enterprise, Burton added. bCentral will serve as the hosted version for small companies, while Great Plains will be the software that mid-market companies install inside the firewall. Moving forward, Microsoft will consider offering hosted versions of the Great Plains applications side-by-side with the bCentral functions, Burton said.

The .Net-enabled bCentral version takes advantage of Passport as an authentication method and allows developers to tap into .Net technologies, such as C#, to make developers more productive, said Marcus Schmidt, lead product manager for bCentral at Microsoft.

Passport will provide a single doorway into both bCentral and Great Plains services.

"That is one of the ways we're achieving integration between the two," Schmidt said.

He added that other than Passport, the benefits of equipping bCentral with .Net will be fully realized several years from now.

"I don't know if customers would see any immediate deliverables, but there will be faster releases of software and services," Schmidt said.

The integrated offering, however, will start to show up in the near future.

"In the next year, a lot of integrated desktop value in the categories of ERP [enterprise resource planning], CRM, and BI [business intelligence] will [start to become available]," Burton said.

The overall goal is to provide the back-end applications, connect them to Office applications, and interconnect them all via bCentral, from which Microsoft will provide business intelligence functionality so users can analyze the data.

In its pursuit of the CRM space, Microsoft plans to do more of what Great Plains has done, rather than trying to meld Great Plains to be more like Microsoft, Burton said. For instance, Microsoft will use the Great Plains channel-oriented approach as a sales avenue.

"We have to cede the market. We'll have to keep prices pretty low for a while," Burton said.

Erin Kinikin, a vice president and research leader with Cambridge, Mass.-based Giga Information Group Inc., said that mid-size customers are looking for a single, integrated solution that includes both CRM and ERP and they don't want separate software for these.

"CRM is just beginning to be a focus area for mid-size customers. Every mid-market company sells to customers and has to manage customers, so CRM will be as important as ERP to them," Kinikin said.

A report issued earlier this week by consultancy Aberdeen Group Inc., based in Boston, said that Microsoft's combination of Passport, .Net, and Web services will alter the way that customers view CRM from large applications into more flexible options that can be adopted as companies need them.

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