Microsoft Convergence 2003 portrayed an Enterprise Solutions crossroad!

Microsoft Convergence 2003 portrayed an Enterprise Solutions crossroad!
Kevin Ramesan - May 2, 2003

Event Summary

On March 19, 2003, Microsoft (NASDAQ: MSFT) conveyed more than 3000 of its business partners, hot prospects and best customers to its seventh annual event in Orlando, Florida. This year the conference focused on the convergence of Microsoft business solutions and the launch of both Microsoft CRM application and Microsoft Business Portal. Both products leverage the Microsoft .NET Framework and extensively integrate with Microsoft Business Solutions-Great Plains and Microsoft Business Solutions-Solomon business applications. Microsoft is aiming at a true single-source for business information and processes. The emphasis at Microsoft Business Solutions conference was to demonstrate lower cost of ownership through ease of integration and use. Microsoft integration's masterpiece was clearly Microsoft Outlook.

Founded in 1975, Microsoft is the world leader in software for personal and business computing. Microsoft Business Solutions offers a wide range of integrated, end-to-end business applications and services designed to help primarily small and midmarket companies with their financial management, analytics, human resources management, supply chain management, e-commerce, manufacturing and customer relationship management business processes.

The recently introduced Microsoft CRM product, which was largely demonstrated during the Convergence 2003 show, is expected to be available before the end of the year in other parts of the world besides the USA and Canada.

Product Definition & Market Impact

The introduction of Microsoft CRM fully supports the Microsoft vision to create an interconnected workplace, connecting employees to information, businesses to customers, and the front office systems to the back office solutions. The roadmap to this initiative was instigated by Microsoft purchasing Great Plains in December 2000. That turned out to be a good move to get penetration into the medium-size market and over time, it helped Microsoft put together all the pieces, CRM, ERP and supply chain management. In May 2001 Navision was also added to Microsoft fleet of business solutions.

The small and the medium-sized market is what represent the biggest growth potential in the coming years and Microsoft is directly aiming at this potential. Microsoft has no plan of moving upward and going head-to-head with strategic partners and market leaders such as SAP or Siebel, reports Holly Holt, senior product manager of CRM at Microsoft.

Microsoft CRM is built on .NET technologies using Visual Studio .NET and is fully integrated and accessible through Outlook or Internet Explorer browser. Microsoft's objective was intended to leverage the widespread usage of Microsoft Outlook in the business environment and make the usage of MS CRM accessible to this community with minimum training. There are a number of easy customizable forms and settings, and they are carried forward during upgrades. For more complex customizations the use of Microsoft Software development kit (SDK) is required.

A Very .NET Architecture

During the Convergence 2003 event, Microsoft invited two of its customers to demonstrate the success of MS CRM implementations. Both customers d relied on beta versions to fulfill their implementations. Among the two case scenarios one could be considered as a small project covering ten users. The second project could be seen as a medium sized venture covering over 80 users. Prior to their implementations both customers were running Microsoft SQL servers. During the implementation, the medium sized company faced the challenge of integrating one of its existing applications to MS CRM. The connection was achieved through an Application Programming Interface (API) developed internally using .NET technology. The challenge for small and mid-sized companies to implement CRM is the requirement for a relatively easy integration. Microsoft claims that there is a tight integration between MS CRM, MS office and all the other Microsoft Business Solutions.

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The core CRM application offers two distinct modules Sales and Customer Service. This is Microsoft's first-generation product with vanilla features; it's nevertheless an attractive combination considering the total integration with MS Outlook and MS office. .NET is Microsoft's platform for XML Web services, which allow applications to communicate and share data over web, regardless of operating system or programming language. While .NET technology is now being adopted by many SMB players and end-users for its capabilities to quickly and easily integrate applications and Web services, others standardize on J2EE; some vendors support both platforms. The real question is: Web services or not?

Although achieving ROI is still being considered as number one priority within enterprise-sized CRM projects, in the mid-sized market the emphasis is on integration. To that end it is not yet clear how easy MS CRM would integrate through the Biz Talk Server with many Third Party applications and namely with a myriad of legacy systems and other packaged back office applications. Microsoft's small number of real case scenarios still needs to grow to allow us to get a better grasp of the issue.

As it stands today MS CRM application provides two main modules that can be purchased separately, Sales and Customer Service. There are also two flavors, the Professional and the Standard. The Professional version includes all Microsoft CRM Sales Standard features plus other features such as Quotas, Product Catalog and Specialty Workflow.

Microsoft is also working on releasing a version with mobility capabilities and soon will deliver an import/export tool for customers that are looking to migrate from Act or Goldmine to MS CRM. Microsoft and Surebridge have partnered to offer an ASP version of MS CRM. Customers can opt to host their CRM application along with their mail server at Surebridge premises for an extra fee per month.

Surebridge headquartered in Lexington, Massachusetts, is a provider of outsourced enterprise application solutions for middle market companies, delivers brand name application choice and strategy, implementation, and outsourcing services.

User Recommendation

Microsoft's core CRM Functionality strategy can be translated as a real first innovation that would set a precedent within the CRM arena. Microsoft has already set the ground for .NET technology to be viewed as a technology standard and is now counting on its core CRM application to be considered by the industry as a standard to build upon.

Microsoft's approach is to partner with nearly 150 independent software vendors (ISV) by empowering them in using the MS CRM core functionalities in order to extend its capabilities. Customers with specific needs can access the many different ISV's to find solutions that would best fit their projects. This flexibility is permitted by the extensibility and programming capabilities of Microsoft CRM to develop different vertical skins and technical integration capabilities.

There are many MS CRM flavors available already such as computer telephony integration, campaign management, PRM (Partners Relationship Management) and so on. Each ISV could then be seen as new CRM player adding to an already large number of CRM providers. MS CRM is distributed through a large number of authorized resellers, more than 1000 right now. So the question that first comes to one's mind is to wonder how the customer will navigate through that plethora of ISVs and resellers that Microsoft is partnering with.

The issue is how could the Microsoft traditional business model be implemented in a more complex and sophisticated field as CRM. It is paramount to the end-user to have a one-stop-shopping experience where he can find a solution that fits its requirements and a reseller that understands what CRM is all about. If Microsoft fails to create the standard, once again we will witness growing stack of unsatisfied customers and CRM failures in the SMB market.

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