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March 18, 2002

Microsoft Announces CRM

Is Microsoft signalling its entry in business process automation with Microsoft CRM? This new product from Microsoft should have smaller CRM companies worried.

by Stewart McKie

So Microsoft is announcing Microsoft CRM (MSCRM). So what? Yet another CRM solution targeted at small- and medium-sized businesses. Many other vendors, including Microsoft's own bCentral Web Services broker site, have offered similar products and services for years. However this announcement has some interesting perspectives.

A New Side of Microsoft

For a start, you don't often see a business process automation solution (BPA) called "Microsoft" anything. In this case, not "Microsoft Great Plains CRM" but plain-old Microsoft CRM. No beating around the bush here. That's significant because I think this is one of the first product announcements from Microsoft that actually announces something else: Microsoft is now in the business of BPA.

Also Microsoft claims that this new product is its first .NET business solution designed from the ground up for this platform using the .NET Framework. So, MSCRM isn't just a new business solution, it also leverages new technology with an architecture that makes it easier to increase the product functionality in the future with "enhance and extend" Web services that can use the XML and SOAP APIs native to .NET.

Shark in the Mirror

Of course, the delivery of MSCRM is not scheduled until the end of 2002, and the functionality, despite a jazzy new UI, is clearly targeted at the smaller business. So this announcement does not threaten CRM leaders like Siebel Systems Inc. (although I would also say that the future looks limited for the Great Plains Siebel Front Office offering). But MSCRM could pose a problem for desktop CRM leaders like ACT! and Goldmine, any small business CRM offering with a value proposition tied to integration to Microsoft Outlook, and perhaps some well-established ASP offerings like Upshot.com, which has already begun to swim upmarket (as anyone would seeing a shark in their rear-view mirror).

As usual, a key advantage of any Microsoft BPA offering is the wealth of integration opportunities available to it. In this case Microsoft CRM is integrated with Outlook, Word, and Excel via the Office SDK and the Microsoft Great Plains and Solomon mid-tier ERP offerings. MSCRM also comes with tools and SOAP APIs to make sure that the extensive Microsoft reseller channels can surround the product with their own vertical product and Web Service functionality.

We already have Microsoft ERP, in the guise of the Great Plains/Solomon offerings, now we have Microsoft CRM. Microsoft SCM (supply chain management) is likely to be a few years off, but a new "Microsoft Financial Reporting and Budgeting" offering can't be far off as FRx (part of the Microsoft Great Plains Business Solutions division) prepares an interesting new release of its financial report writer and refines its recently acquired budgeting offering.

Who knows, we may even see Microsoft CRM added as another optional module in the Office suite and then we'll have the clearest signal yet that Microsoft is in the BPA business.