Pressing on with its software as a service about-face, Microsoft Corp plans to launch an on-demand CRM service of its own next year under its emerging Live brand.
Microsoft Dynamics CRM Live is scheduled for launch in the second quarter of 2007 as part of the Live set of internet-delivered hosted application services.
It will be operated by Microsoft from its own data centers, which marks a radical change in its SaaS delivery strategy. Until now Microsoft has shied away from direct provisioning.
Once it belatedly converted to SaaS, its stance had been that it offered customers a choice of on-demand or on-premises applications but they would be delivered via its partner network and that it had no plans to offer a hosted operation directly.
Although not admitting that the company was completing an about face, Microsoft’s UK head of CRM Jason Nash said did say that just because we said we would not do something in the past does not mean we will not do it in the future.
The announcement of a direct hosting service was inevitable as it does not make sense for Microsoft not to host its own services and it has gradually been making hosted-friendly moves.
These have included Microsoft Dynamics CRM Professional Edition for Service Providers, which is aimed at organizations who offer hosted Microsoft CRM directly to end customers and ISV’s like backbone telco providers and VARs, plus the introduction of hosting licensing options. Microsoft also said the next CRM release, known as Titan, would be a multi-tenant architecture. CRM Live will be part of the Titan release.
Nash said the decision to move to in-house hosting was just extending choice to the next level, and was a response to customer pressure from organizations looking to Microsoft to provide infrastructure and security.
When [organizations] are looking at hosting they want a long-term relationship, he said.
Although Microsoft was keen to stress that there was no loss of partner opportunity, customer requests for direct Microsoft-hosted facilities does not indicate complete confidence in partner-based delivery. As SaaS spreads, data center quality and service provider viability are becoming more of an issue.
Customers will be able to choose between an on-premises version of Titan, an on-demand service provided by Microsoft partners or an on-demand service provided by Microsoft.
All three deployment options will use the same code base and there will be no difference in functionality or user interface. In theory, users will be able to move between deployment options. Microsoft said it will provide the necessary tools and utilities.
The major difference between the on-demand deployment options is that Microsoft, in common with other hosted providers like Salesforce.com Inc, will not allow third-party code within its data center. User configuration is permitted, however.
Customers that want to run custom .NET assemblies are expected to do business with Microsoft partners that provide hosting facilities. Microsoft also believes customers will opt for partners when they want deep industry-specific functionality delivered via the hosted model.
The pricing model has yet to be fixed, but Nash said Microsoft was aiming to enable partners to generate revenue off of its platform. It could be in the form of revenue sharing, an introducer’s fee, or an ongoing percentage of revenue.
CRM Live is slated to be introduced in North America in Q2 2007 but there is no date for international availability.