Showing its continuing reluctance to maintain nonstrategic hosted services, Microsoft has sold Dealerpoint, its hosted customer relationship management (CRM) service for automobile dealers, to auto industry ISV Reynolds and Reynolds. According to unconfirmed reports, the price of the sale was about US$7 million.

Launched in Feb. 1999, Dealerpoint delivers to local automobile dealers leads generated by Web sites, including MSN Autos (formerly known as CarPoint) and car company sites. Approximately 4,000 dealers now use Dealerpoint or SalesPoint, a private-label variant created by Ford. Creating and operating Dealerpoint also helped Microsoft gain experience in the CRM field and create technology that can be used in other CRM products.

In general, Microsoft aims for the broadest audience possible with any given product line (as CEO Steve Ballmer has said, Microsoft is interested in "big numbers") and relies more on partners to serve vertical niches. Now that the company has leveraged its experience with Dealerpoint into CRM products that target a broad audience—particularly Microsoft CRM, a new server-based product for small and mid-size businesses (see "CRM Server Ships")—there is no strategic reason to maintain a CRM service tailored specifically to the automobile industry. Thus, the company agreed to sell Dealerpoint to a longtime partner, Reynolds and Reynolds, which has collaborated with Microsoft on an online car-buying service, among other initiatives.

For background information on Microsoft's movement away from hosted services, see "Hosted Services Becoming Lower Priority" on page 22 of the Oct. 2002 Update. Reynolds and Reynolds is at www.reyrey.com.