Microsoft Paints CRM Landscape On Lately A ‘Still Nature’ Business Applications Scenery
Part 2: Challenges and User Recommendations
Paints CRM Landscape On Lately A Still Nature' Business Applications
- August 16, 2002
Part 2: Challenges and User Recommendations
July 11, Microsoft Corporation (NASDAQ: MSFT), the largest software
company in the world, fleshed out the contents of its recently pre-launched
Microsoft Customer Relationship Management (Microsoft CRM)
offerings for the mid-market, together with an indication of pricing.
Earlier this year, the company indicated that it planned to deliver a
CRM solution specifically aimed at medium-sized organizations.
Microsoft's ambition will be its greatest challenge too, as the company
has concurrently experiencing another almost disruptive technology transition
similar to the transition from character-based DOS to graphic-based
Windows OS platform on the PC-based infrastructure of early 1990s.
Nowadays, it is about the transition from Windows to .NET, using Internet
rather than PCs.
the company has been engrossed in a gigantic task of transforming Internet
from a presentation-only to a programming medium as well by promoting
open standards based Web Services (see Liberty
Alliance vs. WS-I; J2EE vs. .NET; Overwhelmed .YET?), its applications
competitors/partners have solely been focused on their core competencies
(i.e., product functional footprint). Therefore, given their access to
the same technologies, it is no wonder that many other vendors have delivered
their products leveraging .NET and other Microsoft technologies much sooner
than Microsoft itself (see Epicor
Claims The Forefront Of CRM.NET-ification).
is Part Two of a two-part note on Microsoft CRM. Part
One detailed recent announcements and discussed the Market Impact.
its hand, Microsoft Business Solutions is now up to its gills with soul-searching
dilemmas, possibly with more issues than it would wish to be handling
at the moment. With the addition of Navision's array of applications,
some of which had long been direct competition to the Great Plains products
and with many products still leveraging proprietary toolsets, the division
will have a challenge to figure out how to leverage the installed base
of over 260,000 customers and how to avoid impending products/geographies
conflicts in over 4,000 combined partners.
MBS gets distracted by its efforts to provide a clear and concise product
roadmap for partners and prospects, as to neutralize significant overlaps
in the applications and a hefty cost to maintain and enhance the products,
as well as a danger of the brand dilution/confusion to prospective buyers,
other vendors will use that time to perfect their functional differentiations.
It is not that inconceivable that the competitors will come up with their
products' Outlook integration (which is current Microsoft CRM strong selling
feature) and will further establish their expertise in some vertical industries.
the word processor/spreadsheet analogy presented in Part
One should not necessarily be repeated in the case of the CRM market,
given the different nature and complexity of the product groups. While
small enterprises desire products and services designed, priced and delivered
from vendors that understand their needs and are focused in that regard,
Microsoft would definitely not be the only one that fits the picture.
However, the functional, process, and integration requirements of a small-to-mid-market
company can be just as sophisticated as those of a large enterprise, particularly
if it is a multinational entity. While mid-market companies incline toward
effectively packaged applications that are easy to use, require less skilled
resources, and are reasonably low priced, the idea that mid-market companies
should settle for a pure-vanilla CRM implementation is a fallacy.
such mid-market CRM vendors as Onyx, Best Software/SalesLogix,
Pivotal, Kana, and E.piphany might have thereby acquired
another lease of life extension in the short term to redefine their value
proposition, especially given that some have recently secured new funds
and/or found a solace in a partnership with IBM.
competition from Microsoft is likely to immediately affect the prominent
players in the lower-end of the market, including FrontRange (the
GoldMine FrontOffice product), Epicor Software (the
Clientele product), Multiactive Software (the Maximizer
Enterprise products), and some of the existing MS Outlook-based CRM
providers like Oncontact Software, Multiactive Software,
and WorldTrak, as well as hosted providers Salesforce.com
or UpShot. Although not very soon, all the above-mentioned will
be affected in the long run, as new functionality and product maturity
make Microsoft CRM more amenable to the higher-end of the market segment
addition to the likes of SAP, Oracle, Siebel, PeopleSoft
and J.D. Edwards, which are still above MBS' radar screen (Microsoft is
not to be blamed for their lower-end of the market recent aspirations),
endangered exceptions though might be the vendors with established integration
with back-office systems that also feature strong functionality in certain
manufacturing industries (see some examples in Mid-Market
ERP Vendors Doing CRM & SCM In A DIY Fashion and SalesLogix
and ACT! Officially Branded As Best Software). Still, no one should
be too relaxed, as MBS will breathe their necks down, sooner or later.
and medium size businesses using Microsoft Great Plains (and possibly
Navision) back office applications and smaller organizations using Microsoft
desktop and office applications that have simple CRM product needs (simple
sales & marketing, and basic customer service activities) and interest
in Web Services should pay attention to this news. They should evaluate
the above CRM functional enhancements as a way to add value to their existing
applications although bearing in mind that other vendors currently offer
mature products. These companies should consider adding the announced
functionality to their requirements list, as to secure value in terms
of both cost savings and increased efficiency. Approach Microsoft to clarify
for you the subtle differences (and likely functional overlaps) between
Microsoft CRM and other small business CRM products the company offers.
fact remains that the product will likely not appeal to companies that
need more complex CRM capabilities or must manage customer relationships
through diverse lines of business (LOBs) at this stage. These customers
would most likely require extensive customization, for example building
workflow managed processes to align sales teams by territory, product
line or campaign. Moreover, the enterprises that have integration needs
outside of the Microsoft environment, have complex sales and call-center
service business practices, or need advanced CRM functions such as product
configuration, content management, personalization and relationship optimization,
will have to look at more sophisticated offerings mentioned earlier.
due to the likely product immaturity small businesses with less than 100
employees should consider other products until 2003 in North America and
in 1Q04 in the rest of the world. Also, bear in mind that the first release
of Microsoft CRM will not provide tight call-center integration or permit
significant application customization, and it should not be short-listed
by larger or more complex enterprises, with multiple-platform and strong
a more general note, CRM Vendors' domain expertise pertinent to industry-specific
business processes (e.g., claims processing for insurance companies, service
provisioning for telecommunications, billing for utilities) has been a
key success factor (KSF) of application implementation and reducing upfront
need for application customization. The enterprises should therefore challenge
vendors to demonstrate breadth and depth of their vertical expertise and
to demonstrate support for vertical business processes and rules through
both product functionality and underlying technology.