Data Center Hosting and Software Delivery
Microsoft offers customer choice when it comes to delivery models, supporting on-premises, SaaS and partner hosted. This flexibility is further enhanced by permitting customers to switch between delivery models at their desire. Additionally, it's possible some customers may choose a hybrid approach. For example, it may make sense to implement the on premise version for a centrally located call center while using the on demand version for regionally or globally distributed sales staff.
The company offers a flexible and financially backed Service Level Agreement (SLA) for its SaaS CRM delivery. The SLA is measured monthly and guarantees 99.9% uptime. The remedy for failed uptime is as follows:
For downtime resulting in 99% to 99.9% availability, the customer receives a 25% fee reduction.
For downtime resulting in 95% to 99% availability, the customer receives a 50% fee reduction.
For downtime resulting in less than 95% availability, the customer receives a 100% fee reduction.
Because Microsoft normally bills in arrears, SLA credits are applied in the month of downtime occurrence. Planned downtime is preceded with a five day notice. The only caveat to an otherwise impressive SLA is that any service interruption must last at least 15 minutes before counting as downtime.
Microsoft does not disclose the relative breakdown between SaaS and on premises deployment, however, our estimate based on several executive interviews and other research is that approximately 88 percent of Microsoft's 24,000 CRM customers run the software in house. However, the relative proportions are rapidly shifting. In the first half of 2011, nearly 100,000 customers had or were trialing the SaaS CRM product and it is clear that many of those evaluations plan to continue transition to a production environment in the cloud.
While Microsoft does leverage the same code base for both on demand and on premise CRM, upgrades and new versions are generally not released at the same time for both delivery options. Therefore, buyers seeking specific new functionality should verify those feature sets within their desired deployment approach.
Historically, new Dynamics CRM versions have been released about every two years. With Dynamics CRM 2011, Microsoft is accelerating the pace of new releases to twice annually, delivered in the Spring (Q2) and Fall (Q4). Microsoft is further dividing these semi-annual Service Updates into the two types of Automatic and Scheduled. The Scheduled updates are somewhat unique in the SaaS CRM industry as they possess the deeper functionality enhancements and permit customers a one year window to schedule and deploy the upgrade. This atypical advance notice and customer control is helpful in testing items that may have upgrade implications (such as system integration or software customization) as well as preparing users for changes in their CRM system.
On a grander scale, the company is readying a strategic push to the cloud which may facilitate significant market share gains. Microsoft is building out data centers in Boydton, Virginia; Chicago; Dublin, Ireland; Quincy, Washington and San Antonio, Texas. Each data center cost approximately $500 million although costs decrease with each new facility based on efficiencies and economies of scale. To facilitate cloud adoption where culture or government compliance requires data remain in country, Microsoft has introduced the Windows Azure Appliance—a turnkey cloud platform consisting of hundreds or thousands of servers that customers can deploy in their own data centers while still achieving certain SaaS benefits such as regularly receiving Windows Azure software updates. How Dynamics CRM will play on the Azure Appliance is still in the planning stage but the two most certainly will come together.
An on-premise Dynamics CRM installation requires Windows Server 2008 (Standard, Enterprise and Datacenter, as well as Small Business Server 2008) and SQL Server 2008 (Standard, Enterprise and Datacenter). The CRM system can run in a virtual server mode on Hyper-V or another hypervisor on the Microsoft Windows Server Virtualization Validation Program. Microsoft recommends at least a quad-processor server.
CRM buyers have a choice between two on-premise alternatives. The first is Dynamics CRM Workgroup Server 2011, which is limited to one server for one organization and supports a maximum of five users. Or Dynamics CRM 2011 Server, which has no user limits, permits multiple organizations and can federate processing across multiple servers.
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