Since Microsoft’s acquisition of Great Plains, everyone has been trying to decipher its enterprise applications strategy. While there are still some questions, it now seems clear that Microsoft will be a major player in the CRM mid-market. Medium-sized companies will be strongly drawn to out-of-the-box software that looks and feels like Outlook.
Microsoft has announced the pricing details for its forthcoming CRM applications.
Microsoft has been trying to build its position in enterprise applications, buying mid-market ERP vendor Great Plains in 2000, and Denmark’s Navision this year. The IT giant’s latest move – revealing its CRM price guidelines – sheds more light on its CRM strategy.
The mid-market (companies with $5-$250 million of annual revenues) is served largely by ‘national champions’ in different countries, plus players such as GoldMine, SalesLogix, Onyx and Pivotal. Despite their claims, giants such as SAP, Siebel, PeopleSoft and Oracle are solidly focused on large enterprises.
Microsoft’s interest in the market is no surprise. The IT slowdown has left vendors searching for higher-growth niche segments, and Datamonitor expects Western European mid-market CRM license revenues to grow at 14% a year to 2005, compared to 7% for high-end revenues.
Starting at $395 per user (with a higher-range edition at $1,295 per seat), Microsoft is taking aim at SalesLogix and at those higher up the food chain. It hopes to use its position as the largest desktop software and operating system supplier to crush the opposition.
By leveraging Outlook’s look and feel – and functionality – Microsoft’s initial CRM release should receive a warm welcome from the less tech-savvy and those with scarce IT resources. This should make MS CRM appealing to the mid-market, which is obsessed with the need for low-cost ‘out of the box’ solutions.
Built on the .NET platform, MS CRM also validates Microsoft’s own web services vision. And by maintaining relations with key ISVs (either reselling or adding verticalized features), MS should also appeal to the higher-end of the mid-market.
Microsoft has struggled with enterprise applications in the past. However, given the nature of the mid-market, its limited functionality needs, its price-sensitivity, and Microsoft’s ability to leverage familiarity with its desktop applications, MS CRM looks a good bet.
Related research: Datamonitor, From CRM to xRM (DMTC0846)
You can download a FREE technology report at www.dmfreereports.com