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Microsoft Dynamics CRM 2011 Independent Software Review

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Service Providers
Microsoft manages what is arguably the best enterprise software partner channel in the world. On premise CRM software is delivered exclusively by Value Added Resellers (VARs). While VARs are authorized to sell and support either the on premises or cloud versions, as noted earlier, many VARs exhibit clear favoritism toward the on premises product due to significant differences in financial remuneration.

The CRM online product can be delivered and hosted by either Microsoft directly or a business partner. While some larger companies prefer to have a direct relationship with their publisher, small and midsize businesses may achieve superior services delivery and more personalized support from local partners and face to face relationships. The Dynamics partner channel is global, deep and mature. There are over 4000 Dynamics CRM partners worldwide. The Microsoft Dynamics community, made up largely of professionals, reached 50,000 members in April 2011 and continues to grow.

Global or multi-national companies often seek out very large integrators for implementation services and support. While many of these global integrators were somewhat reluctant to initially get on board with SaaS solutions, due to the significantly smaller project sizes, many have complimented their business models with new specialties for SaaS CRM and gained strong expertise with Dynamics. Unlike the broad and diverse VAR channel made up of thousands of companies, the number of global service providers with Dynamics expertise is relatively small and includes companies such as Accenture, Avanade, Cap Gemini, Ciber, Deloitte, HCL, HP Enterprise Services, Fujitsu, Hitachi, Infosys, Logica and Wipro.

With the proliferation of cloud solutions, several integrators are looking beyond a single cloud application and developing cloud sourcing services and firmware to rationalize multiple vendor solutions into a single customer environment. Some solutions resemble a cloud broker model while others act as a front-end consolidation tool which provides multiple vendor systems management for factors such as provisioning, authentication management, integration, security rights and multi-vendor contract management.

Vendor Viability
Microsoft is fiscally sound, relatively diversified and competitively strong. The company's longevity is a competitive strength in a CRM industry where several competitive products are from far less stable, emerging growth companies. While its corporate viability is strong, it does face some unique pressures with far reaching implications, including regulatory pressures, new technologies such as open source software, new well funded competitors such as Google and Amazon and innovators such as Salesforce.com which garner early market share leadership before the software giant enters the market.

Myths Debunked
The initial strategy to morph Dynamics CRM and Outlook was guided by objectives of user simplicity, unified desktop systems and improved staff productivity. While sound objectives, competitors quickly pointed out the practicality which left users navigating through multiple screens and windows, incurring lengthy click streams and sometimes finding themselves at a loss of how to back track or repeat common work processes. Dynamics CRM 2011 has remedied much of that confusion by leveling the number of pages for most business processes, merging dynamic data displays to common views, better linking core objects, improving work flow processes and simplifying navigation with a contextual ribbon bar.

Other CRM competitors have suggested the CRM software is little more than a side business for the software giant. This dialogue has even been amplified by analyst firms such as The 451 Group which have suggested that "Microsoft would be best served by simply acknowledging that it never made much of Dynamics, and selling off its CRM and ERP assets". In reality, Microsoft's investments in CRM and ERP have been big—over a billion dollars for the Great Plains acquisition, another billion for Navision and many tens of millions in continued investment—and payback has not met early forecasts. Nonetheless, Microsoft clearly has the wherewithal and tenacity to continue a strategy which it believes will be ultimately fruitful.

Based on visible and vocal executive sponsorship from the top of the company, substantial R&D investments and consistent statements from Microsoft executives we believe that claims which suggest a lack of strategic intent for all the Dynamics solutions are without basis and we have every reason to believe that Microsoft intends to achieve a CRM leadership position.

There is also a myth that Dynamics is limited to or most suitable for small businesses. While the CRM product does often satisfy small and midsize businesses (SMB), it is in no way out of reach to enterprise customers. In fact, approximately half of Dynamics customers are enterprise level organizations. The product's feature sets, scalability and global support clearly make it competitive in the enterprise market.

Software Pricing
Dynamics CRM online is priced as a per user per month subscription. The subscription includes the CRM suite of sales, marketing and customer service. Unlike most competitors, Microsoft bills monthly in arrears. Microsoft provides frequent promotional campaigns, such as the switch over migration from Oracle or Salesforce.com. Current SaaS pricing is $34 per user per month.

The on premise CRM solution is a traditional software license procurement where all payment is due up front. Specific pricing varies by modules and user counts. Microsoft provides financing options upon request.

While subscription pricing is a strong advantage for Dynamics CRM online, caution should be exercised for organizations wanting to begin with the SaaS solution – possibly to achieve early validation or complete a proof of concept – however later switch to an on-premise installation as Microsoft does not provide a credit for prior SaaS payments to be applied to the on-premise redeployment. Customers migrating from SaaS to on premise will be required to purchase the traditional on-site software licensing at the time of conversion.

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While subscription pricing is a strong advantage for Dynamics CRM online, caution should be exercised for organizations wanting to begin with the SaaS solution and later switch to an on-premise installation as Microsoft does not provide a credit for prior SaaS payments to be applied to the on-premise redeployment.

 

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