Hosted Service Based on CRM Product

A Microsoft-hosted customer relationship management (CRM) service, called CRM Live, will be available in the second quarter of 2007 and will compete with Salesforce.com. Announced in July 2006 at Microsoft’s Worldwide Partner Conference, the service will build on the next version of Dynamics CRM, code-named Titan and scheduled for the first half of 2007. The timing of the announcement, one year ahead of availability, could slow the momentum of Salesforce.com as prospective CRM customers may forestall decisions until CRM Live is available. It could also have a similar effect on Microsoft partners offering hosted Dynamics CRM today.

Supporting ‘Multitenancy’

Basing the CRM Live service on Dynamics CRM’s Titan release allows Microsoft to avoid a barrier faced by service providers using the current version (Dynamics CRM 3.0). Specifically, providers (including Microsoft partners ActiveIS, CRM OnTarget, and Navisite) cannot securely host multiple customers on a single server. Consequently, hosted customers require dedicated server hardware, which carries higher operating costs than consolidating customers on shared hardware and may make it difficult for providers to beat Salesforce.com on a recurring cost-basis.