these days of frenetic mergers and acquisitions in the enterprise applications
arena, there still seems to be a place for some co-opetitive alliances too.
Namely, at the end of July, Scala Business Solutions (ASE:
SCALA), an Amsterdam, the Netherlands-based provider of collaborative enterprise
software for mid-size enterprises and subsidiaries of global corporations, announced
it has signed a letter of intent with Microsoft Corporation
(NASDAQ: MSFT), the largest software provider in the world, to extend Microsoft
Business Solutions CRM (Microsoft CRM) software and integrate it with
its iScala Collaborative ERP system. The agreement is expected
to be final in September.
companies will work together on developing Microsoft CRM for commercial release
by Scala as iScala CRM, a new product that Scala will offer
to its global customers as part of its iScala ERP product as an integrated solution
for the enterprise. With iScala CRM, Scala will try to leverage the proven capabilities
of its ERP offering with functionality such as multi-currency capability, international
tax calculations (e.g., value added tax (VAT)) and business intelligence (BI)
that should meet the needs of Scala's customers doing business in over 140 countries.
Scala believes iScala CRM will allow it to address growing customer demand for more business functionality. To that end, the vendor plans to integrate the CRM functions with iScala Collaborative ERP by the end of 2003, while the integration with sales orders, stock control, and service management should follow in 2004. Scala expects its new offering to appeal to many of its existing customers; initially, it will be offered in key European markets including Russia, as well as Chinathe markets where Scala has traditionally been strong and has a leading market presence.
By 2005, Scala expects iScala CRM to contribute an additional 20 percent to its annual revenue. In addition, this new offering should enable Scala to offer iScala CRM in some vertical industries where the iScala product is especially strong, such as construction equipment, pharmaceuticals, and food and beverage. As part of its market preparation, Scala has established a go-to-market team from across the company, including product development and management, sales and marketing, and support resources. The team will be working closely with Microsoft's CRM team and key Scala customers in the lead-up to the product's commercial release.
this alliance should likely render rather questionable Scala's collaborative
partner agreement with CRM software provider Ascent Technology,
which was just announced in February. The agreement was seen to enable Scala's
partners and customers to take advantage of a completely integrated solution
for the enterprise, combining Ascent's applications for CRM with Scala's Collaborative
ERP platform, and over twenty joint customers have already been using the integrated
solution. However, Microsoft CRM will likely get a "right of way" due to Ascent's
limited presence outside Europe, and limited number of its enterprise applications
partners for prepackaged integration arrangements.
demonstrating its commitment to Microsoft's technology stack, at the beginning
of July, Scala and its partner Decision Support Panel (DSP)
have demonstrated how easy it is to use a web services-based solution to seamlessly
integrate the iScala Collaborative ERP system with Microsoft Office
System applications. Scala claims its customers can work in any Microsoft
Office 2003 applicationsuch as Word, Outlook,
Access, or Exceland interact with information
from their iScala application without having to login to the iScala system.
The iScala/Office integration thus enables Scala customers to easily complete
routine tasks more quickly. The integrated solution was publicly demonstrated
for the first time by Scala and DSP at Microsoft Tech-Ed Europe
2003, the premier technical training event for Microsoft-based products
and technologies, in Barcelona, Spain. The integrated solution is based on standard
Extensible Markup Language (XML) templates and iScala Managers
that act as web services to exchange information between the ERP database and
a Microsoft Office document.
The iScala/Office integration is part of Scala's strong and long-term technology cooperation with Microsoft, and it gives users the ability to employ a "one source" approach to organize information, readily access that information, manage documents, and enable efficient collaboration all in a familiar, Microsoft Office-integrated environment. According to Scala, XML technology and web services architecture is at the core of the iScala Collaborative ERP system, so it was easy to develop the integration between Microsoft's front office products and Scala's back office solution.
is part one of a three-part note.
two will complete the discussion of the market impact.
three will cover challenges and make user recommendations.
CRM alliance, like many alliances in the enterprise IT sector in the past, has
merits of mutual benefits, particularly in the short to medium term, but it
also comes with typical questions of longevity due to the fickle motives of
the participants that compete in other enterprise application areas. The market
has been well aware of the magnitude that Microsoft has placed on its CRM product
introduction, whose general availability happened in January, about a year after
the initial announcement of Microsoft's own CRM product intent (see Microsoft
Throws .NET At SMEs, With CRM As Bait), and almost a half year after the
more fleshed-out Microsoft CRM strategy blueprint (see Microsoft
Paints CRM Landscape On Lately A 'Still Nature' Business Applications Scenery).
The product's launch date had even taken a slight setback, given it was initially
anticipated for the end of 2002 and justified by the apparent need to perform
additional testing and quality assurance (QA) due to a relatively low number
of companies that had performed beta-testing. Nevertheless, since the release
1.0 at the beginning of 2003 (see Microsoft
Convergence 2003 portrayed an Enterprise Solutions crossroad!), Microsoft
CRM has shown a notable uptake by quickly reaching the several hundred customers
mark and showing solid functionality that has so far attracted about 1,300 partners
to sign up, all already surpassing the benchmarks achieved during a three-year
long prior partnership with Siebel Systems.
The Microsoft CRM product initially focuses on two intrinsic CRM modulessales force automation (SFA) and service automation/managementwhile the third "part and parcel" module, marketing automation, is slated for future releases, together with broader e-business functionality featured within field service, mobility, and portals.
that end, its current Professional Edition functionality includes
basic contact management (i.e., interaction and opportunity aspects) as part
of SFA, basic e-mail based marketing campaign tools, and call management (customer
service ticket queues) with a basic customer service knowledge base and content
authoring and approval workflow. These features are what the targeted customers
likely need at this stage, and Microsoft CRM might change the sentiment about
CRM among conservative manufacturing SMEs that have so far been dismissive of
either over-functional, too rigid, and highly priced products on the one hand,
or of inadequate, inexpensive products on the other hand. Thus, an affordable,
straightforward, out-of-the-box application with minimal implementation risk
and innate integration to Outlook, Internet Explorer (IE),
and Microsoft Exchange server will likely strike a chord with
this market segment. Both the browser-based and Outlook-based user interfaces
have the same functionality and the appearance, allowing users to easily switch
from online to offline mode as required, and without a need to learn a different
interface for an "unplugged," on-the-road version.
notable feature would be .NET SmartTag technology, which should
allow users to easily incorporate structured and unstructured information, or
information from multiple systems, into a single document. In other words, creating
requests for quotes (RFQs), dunning letters, purchase orders, and other common
business documents should be rendered simple. It is very likely that the embedded
.NET framework and its notion of a next-frontier integration technology could
become a stronger selling point than the mere functionality, as it allows MS
CRM to go far beyond what most other CRM systems provide in terms of support
for products and inventory. Namely, the product features the ability to store
multiple price lists, information on units of measure (UOM) and item master
detail, while other CRM systems are concerned primarily with the customer records
and transactions. Eventually, MS CRM will provide automatic bidirectional synchronization
with the Microsoft Business Solutions (MBS) Great Plains system
and the other enterprise products within its MBS portfolio.
next release of Microsoft CRM, version 1.2, which is slated for the end of 2003,
will supposedly support nine languages in total, will feature stronger reporting
capabilities based on Crystal Decisions' Crystal Enterprise 9
product and improved setup and development capabilities. The integration with
the MBS Solomon 5.0, 5.5, and MBS Great Plains 7.5
back office applications should be there too. Down the road, Microsoft plans
to unify all its CRM products in the fold, i.e., Microsoft CRM, MBS
Navision, and MBS Axapta's sales and marketing modules
(used mostly in Europe) into a single product, but there is no clear date in
sight for this unification.
However, until Microsoft fully integrates it with its multiple ERP products, MS CRM will remain merely a CRM product with a compelling interface and an enhancements roadmap. Further, given Microsoft's proverbial prominence within and huge benefits from the "law of big numbers" and the "economy of scale" (i.e., selling products with high-volume and low-interaction sales), the Microsoft executives are unlikely to be terribly moved by the MS CRM takeoff so far compared to, for example, the MS Office products' volumes, which have typically amounted to hundreds of thousands and a million licenses during similar timeframes.
concludes part one of a three-part note.
Part two will complete the market impact.
three will cover challenges and make user recommendations.