DENVER – Microsoft is coming out with two SKUs for Dynamics Live CRM with an aggressive price chop intended to capture market share against software-as-a-service players such as Salesforce.com and Siebel.
The two CRM Live editions are professional and enterprise. Both products were US$75 per user/per month, but will now be US$44 for the professional edition and US$59 for the enterprise edition. All versions will have full sales, marketing and service modules that can be accessed through Outlook or a browser client. The only difference is that the enterprise edition has offline data synchronization. Microsoft made the announcement at its Worldwide Partners Conference this week.
The professional version will be released in the third quarter of this year, while the enterprise version will be out in the first half of 2008. Microsoft is taking its price chop one step further with the professional version with a promotion price of US$39.
Joel Martin, market analyst for IDC Canada, believes customers want this because the true SAAS model has not taken off in Canada. “CRM is at a watershed moment in the market and will grow more than 10 per cent in the next few years,” he said.
Martin said he was surprised by the dramatic price drop, but that the industry specific modules could make CRM implementations easier. “A few year’s ago CRM implementations failed because they did not meet the needs of the customers,” Martin said.
Jim Heaton, CEO of Vox Wireless, a Toronto-based solution provider, said the price cuts will put immense pressure on Salesforce.com since it is a publicly traded company what would it mean if 25 per cent of its revenue is cut just to match Microsoft’s new prices for CRM Live.
“If you compare the price of what is coming out it is about half (of what Salesforce.com charges), but that is just half the story. If you compare feature-to-feature with some of Salesforce.com’s plug-ins for an average customer you have to add another $40 to $50 a seat. Really it is one third the price,” Heaton said.
Heaton said that partners need to do the math before entering this market so that they can figure out how to make money from CRM Live.
Vox Wireless has many 10 to 15-seat customers and for every $10 spent the company gets one dollar for professional services, Heaton said. Microsoft also announced Customer Early Access Program, a partner-led plan offered for only the professional version of Live CRM. This no charge program will be extended to the end of this year and can work for any customer with five seats or more.
The company is offering pre-configured vertical temples for the public sector and manufacturing industries. Frank Falconer, CRM product manager for Microsoft Canada, said this offering is essential with specific demos and resources for these two industries. Other vertical packages will be announced later on, he said.
“When CRM Live is out it will have a partner solution marketplace and ISVs can build add-ons to CRM Live and place it on this online market place where customers can find it and see if they like it and purchase it. This is a great opportunity for ISVs who develop add-ons for on-premise solutions and can now be ported over to the Live version,” he said.
Falcone added the CRM Live has the same code as the regular CRM package and therefore users can go back and forth from an on-premise to hosted environments.
More than 600 partners are currently working with the pre-release versions of CRM Live code named Titan. CRM Live is free and billing will start in the first half of 2008.