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Microsoft CRM Online goes live; VARs see partner opportunity

Microsoft CRM Online goes live Tuesday. Some 500 companies, brought aboard by partners, have tested the service.

The new Microsoft-hosted CRM goes live today -- or perhaps goes online is the better term. But, in either case, many say the offering provides partner opportunity in winning business that would otherwise go to Salesforce.com.

Microsoft CRM Online, hosted and managed on Microsoft servers, was promised for the first half of the year and has made that deadline, apparently. Microsoft changed the name from CRM Live to CRM Online just weeks ago.

Some 500 companies, all brought in by partners, entered the months-old early access program to test the beta service, said Bill Patterson, director of product management for Microsoft Dynamics CRM Online. A partner bringing a customer to the CRM Online table will garner a 10% annuity on that service revenue every month as long as the account is active and that partner is the partner of record, Patterson said.

That may not be a huge windfall given the service's subscription price, but it does represent a way for partners to at least play in the game.

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As the company said last summer, Microsoft CRM Online pricing will be aggressive. For CRM Online Professional, the list price will be $44 per user/month, but the debut price will be $39 per user per month till the end of the year. What they didn't say at that time was that the price would include significant storage, 5 GB for CRM Online Professional.

The Professional Plus edition, at $59 per user per month, includes 20 GB of storage. Salesforce.com Team Edition pricing starts at $1,200 per year for five users. Salesforce.com customers typically get 1 GB of storage for the list price and pay extra for additional storage.

Partner opportunity: Moving CRM Online customers from hosted to on-premises

Several Microsoft CRM partners -- some of whom host the product themselves -- said this Software-as-a-Service (SaaS) option gives them a weapon to combat Salesforce.com in accounts.

They can sell the Microsoft-hosted option to companies that don't have the infrastructure immediately but then migrate customer data to an on-premise, or partner-hosted implementation if that becomes a better option.

"The intro of a SaaS product for the partners, which we haven't had access to before, lets us acquire customers quicker," said Steve Bowles, president of Toronto-based Pelagic Solutions Inc., sometimes known as CRMonlinelab.com.

"I've been selling Microsoft CRM since [release] 1.2 and one stumbling block has been that 'instant on' capability," Bowles said. "That's where competitors had an advantage. They could turn a customer on in a matter of hours whereas my pilots took some time."

Ben Holtz, CEO of Green Beacon Solutions, in Watertown, Mass., said he likes the functionality in CRM Online and what it has done to raise awareness for the hosted CRM option. "It will help us win more deals for Microsoft," he said.

Patterson said Microsoft CRM combines marketing automation, product catalog and sales order processing capabilities, not all of which come in Salesforce.com's $65-per-user-per-month Professional Edition.

For Microsoft, CRM Online is probably the most prominent business application in its growing portfolio of "SaaSy" Windows Live and Office Live portfolio. The company, which built its business with a massive army of partners pushing low-margin software, now has to fight SaaS competitors including Google and Salesforce.com, which allied more closely last week. These younger SaaS-oriented rivals have a distinctly more direct (i.e., non partner-based) focus.

Both sides are coming to the middle now as Salesforce.com is pushing itself as a platform provider for developers and ISVs. It has also recruited services and integration partners to link its hosted solutions to legacy on-premise applications. And as Google, the SaaS poster child, tries to break into business accounts, it has recruited VARs to customize its Search Appliance for use inside the firewall.

Still, many Microsoft partners view the whole SaaS push with alarm. They say Microsoft may have the best of intentions, but as customer data moves to vendor servers, partners lose account control to the vendors. The fear is that as vendors try to wring the last bit of profit from each software or service offering, each partner margin will be sacrificed to the vendor's bottom line.

At least with Microsoft, it sees a history steeped in partnerships, something it does not see with Salesforce.com or Google.

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