A July 2005 announcement reiterated previously disclosed plans to support marketing campaigns and service management in a new version of Microsoft Customer Relationship Management (Microsoft CRM), the company's CRM application for small and mid-size businesses. Scheduled for general availability in the first quarter of 2006, Microsoft CRM 3.0 will also streamline product setup, expand language coverage, and add a new edition for smaller companies running Windows Small Business Server. The combination of a more complete feature set, quicker setup and integration, and broader market coverage could accelerate adoption, which has been modest since the product's introduction in early 2003.

However, although Microsoft CRM is overseen by the Microsoft Business Solutions (MBS) business unit, integration with MBS's enterprise resource planning (ERP) product lines is still a question. Microsoft partners are working to integrate Microsoft CRM with Axapta and Navision, but as of May 2005, the product integrates out of the box only with Great Plains. This lack of native integration could represent a missed opportunity for Microsoft and its partners to cross-sell Microsoft CRM to customers using its existing ERP products, which combined have nearly 100,000 customers.

Support for Marketing, UI Tweaks

Microsoft CRM, which has garnered about 4,000 customers since its release in Jan. 2003, helps companies manage customer relationships. For example, sales and customer service personnel can record, track, and update customer interactions, such as sales leads or inquiries about service requests, using Outlook or a Web browser as the client. Microsoft originally planned to release a second major version, Microsoft CRM 2.0, in the first quarter of 2005 but subsequently pushed that version's release into the last quarter of 2005.

In July 2005, Microsoft reiterated that the next version of the product will ship according to that schedule, but said it will be named Microsoft CRM 3.0 rather than Microsoft CRM 2.0. According to Microsoft, the extended development cycle allowed the company to include features it had originally planned for the product's third major release, such as user interface (UI) refinements. Consequently, the company decided to uptick the product's version number.

The most important changes in Microsoft CRM 3.0 are as follows:

New modules for marketing and service management. As Microsoft had indicated in earlier announcements, the new version will include new modules for marketing (for example, managing lists and resources associated with marketing campaigns) and service management (service call dispatch and scheduling, for instance). These modules will complement the product's existing sales and customer service modules. The addition of modules for marketing and service management, which are key components of CRM, should broaden the appeal of the product.

Improved setup. Microsoft CRM 3.0 will get new tools to streamline setup, a feature that is often shortchanged in initial Microsoft product releases and fixed in subsequent iterations. Reliable setup could assuage one common concern of small companies, which are typically unwilling to tolerate (and unable to afford) protracted setup and integration periods before realizing a return on those investments.

UI, integration refinements. Microsoft continues to refine the product's UI, which is modeled on the Outlook client. For example, the UI in Microsoft CRM 3.0 will allow administrators to define roles that specify which data and functions are accessible to users based on their jobs (for example, sales personnel would only see the screens and menus relevant to their work). In addition, Microsoft CRM 3.0 refines integration with Excel—users can import data directly from Microsoft CRM into Excel pivot tables for analysis or charting.

Availability, Editions, and Resources

Microsoft CRM 3.0 will become generally available in the first quarter of 2006. However, the company plans to make the update available to licensed Microsoft CRM customers in the fourth quarter of 2005. Customers who have the Professional Edition of the product with Software Assurance will get the new marketing and service management modules for free. Product pricing has not been announced.

Microsoft will also add a new edition to the Microsoft CRM product lineup, which today includes a full-featured Professional Edition, and a Standard Edition containing a reduced set of product features. The new edition, called Microsoft CRM 3.0 Small Business Edition, is intended for small companies running Small Business Server 2003. In addition, language support will grow: Microsoft CRM 3.0 will ship in 23 languages, up from 16 currently. However, a single product installation will support only a single language; Microsoft has suggested that multilingual support will appear in the product's next revision.

Finally, Microsoft announced that a new subscription-based licensing program, designed to encourage hosted Microsoft CRM solutions, would accompany Microsoft CRM 3.0. Rather than requiring service providers to purchase the software upfront, Microsoft will receive some fraction of the recurring fee that service providers' charge their customers. However, the company did not provide details about the new pricing plan nor did it indicate that Microsoft CRM 3.0 would address product issues that affect hosting scenarios. For example, today Microsoft CRM does not provide multi-instance support; thus, hosted customers typically run on dedicated data center servers (rather than on servers shared by other customers), which increases the cost of the service.

The Microsoft CRM 3.0 announcement is at www.microsoft.com/presspass/press/2005/jul05/07-05CRM30PreviewPR.mspx.

A comparison of features in Microsoft CRM 1.2 Professional and Standard Editions is at www.microsoft.com/businesssolutions/crm/product/crm_edition_comparison.mspx.