February 24, 2003 3:04 PM PST
Microsoft readies new CRM tools
- Related Stories
Microsoft: Office beta born too soonFebruary 19, 2003
Microsoft preps new Office 11 betaFebruary 12, 2003
Microsoft takes wraps off CRM softwareJanuary 21, 2003
New Outlook to give spammers the bootNovember 1, 2002
Siebel, Microsoft ink .Net pactOctober 21, 2002
Microsoft reveals business software plansSeptember 18, 2002
Microsoft jumps into CRM marketJuly 11, 2002
The tool, called Outlook 2003 with Business Contact Manager and developed under the code name Iris, will enter testing next month as part of a second test release of the software giant's Office 2003 software bundle. The Redmond, Wash.-based company plans to sell the tool in addition to the standard version of Outlook already included in Office.
The software will bolster the company's move into customer relationship management (CRM) by providing a tool that allows small-business users to manage customer data and relationships as an adjunct to Outlook's existing e-mail and calendaring functions.
While Outlook 2003 with Business Contact Manager is aimed at entry-level CRM users, Microsoft is also targeting companies of up to 500 employees with Microsoft CRM, a more full-featured product that debuted last month.
The company has not officially announced or released the new version of Outlook. But last week, some customers got a sneak peek at the software, when Microsoft inadvertently posted Office 2003 Beta 2 software on the Microsoft Developer Network Web site. Microsoft later pulled the software from the site.
A Microsoft representative would not comment on whether Outlook 2003 with Business Contact Manager will be packaged with the main Office 2003 suite or as a separate product. No pricing has been determined.
Analysts said the new software will give the company a way to entice existing Office users to upgrade to the newer version. "Microsoft is attempting to take Office beyond basic productivity tasks, where it's hard to drive upgrades," said Michael Gartenberg, a Jupiter Research analyst. "By providing features like Business Contact Manager, (Microsoft) is hoping that small and midsized business users will be attracted to some of these features."
That's Microsoft's primary focus with Office, which commands more than 90 percent of the desktop business application market. For Microsoft, "the issue with Office 2003 isn't staying ahead of the competition but getting people to move off another version of Office," said Paul DeGroot, an analyst with market researcher Directions on Microsoft.
Still, while the software giant's goal with the new version of Outlook is to drive existing customers to upgrade their Office installations, a CRM-focused desktop product could spell trouble for competitors. Analysts said that if companies perceive that they can consolidate the number of software applications they license, and add CRM functions on top of the familiar Outlook interface, they might be enticed to take a look at the product.
Gartenberg, who is familiar with the product, said it is "more of a mini-CRM to take folks from beyond programs like GoldMine or Act."
Act, developed by a unit of Best Software, and GoldMine, sold by Front Range Systems, are contact management products that have grown into low-end CRM tools as both companies attempt to appeal to sales organizations and smaller companies.
"If you can replace another (company's) product that you're paying a couple hundred dollars a seat for with a new version of Office, you might go for that," DeGroot said.
Greg Head, general manager of Act at Best Software, said he was not aware of the contact management features within the new version of Outlook, but said Best doesn't consider Outlook a competitor to Act.
The combination of a low-end CRM tool and the enterprise-level product could bolster Microsoft's efforts to compete with Siebel Systems, SAP and other CRM and business software makers. The low-end product plays to Microsoft's strength: volume.
"The kind of thing Microsoft is most interested in is a high-volume product," DeGroot said. "Nobody can get more products out at low cost to as many seats as Microsoft."
Microsoft can use the market base of Windows and Office--both of which have garnered more than 90 percent of their respective markets--to compete against lower-cost CRM products, while extending its infrastructure to support the company's larger CRM initiatives.
But it's still unclear how the new Outlook product is linked to Microsoft CRM. A Microsoft representative would not comment on whether the new version of Outlook has any ties to Microsoft CRM. The company in the past has said Microsoft CRM will rely on Outlook and other Office products, as well as its server software.
Sources familiar with the company's strategy said Microsoft will not immediately tie the two products together. The software titan is more interested in boosting Office's appeal to smaller businesses--which have different customer management needs--than to larger organizations, the sources said. Still, some features of Outlook 2003 with Business Contact Manager, including contacts, accounts and leads tracking, appear to overlap with Microsoft CRM's module for salespeople.
Small is big
"Everybody is interested in the small-business market right now," DeGroot said. "Oracle is interested in it, as is IBM. Microsoft is trying to scale up, while IBM is trying to scale down. Something like this (new Outlook) could translate into more seats of Office in the small-business market."
A number of the features available in the new version of Outlook have been part of the software for some time, but only usable by companies that took the time and expense to create customized forms. Microsoft also has found new ways to better use some existing features that many customers may have found too cumbersome to use.
One example is a feature called Journal, which is used to track meetings, e-mails and phone calls. Business Contact Manager uses Journal to track "business history." Consumers also have the ability to track activities associated with individuals or accounts and sort those activities by type. That's a key feature of any CRM software.
The new Outlook lets people create accounts, add new contacts to that account, and follow its history. Consumers can track sales and account leads. Another option generates product lists.
In addition to the typical contact records available in standard Outlook, users can create business contact records. These records, which build on the forms capabilities already available in Outlook, include an area for easily tracking activities or linking to other contacts or accounts, among other features.
Like Act and GoldMine, Outlook 2003 with Business Contact Manager is capable of generating about 20 different reports, ranging from neglected contacts to lead referrals to past-due opportunities. Microsoft provides a variety of filters for sifting through contacts, leads and accounts to formulate sales strategies.
The new Outlook also is tied to Microsoft bCentral Web's ListBuilder service. Businesses can organize and export contacts for targeted e-mail advertising campaigns using the ListBuilder service.
Jupiter's Gartenberg said this kind of product-service tie is not surprising. "Microsoft is always about creating (ties) with other products," he said.
News.com's Alorie Gilbert contributed to this report.
1 commentJoin the conversation! Add your comment