November 3, 2005 8:35 AM PST

Microsoft to ship CRM 3.0 update in December

A long-awaited update to Microsoft's customer relationship management software, which will for the first time include subscription-style pricing, will debut next month, the company said.

Microsoft CRM 3.0, originally expected early next year, will ship in the first few weeks of December, said Brad Wilson, general manager of Microsoft's CRM product line. The new release, roughly two years in the making, adds marketing management and service scheduling capabilities to the product's existing sales and customer service tools, he said. Tight integration with Microsoft's Office desktop tools is a key feature as well.

The biggest change, however, will be the addition of a hosted version of the software that Microsoft's partners will offer as a service over the Web. Microsoft will continue to sell a traditional version of the software which customers install on their own servers.

Competitors in the CRM business, such as Salesforce.com and Siebel Systems, which database giant Oracle plans to acquire, already offer hosted CRM. Industry giant SAP has yet to introduce a hosted version of its products.

The hosted version, which will be priced by partners, requires no up-front contract, Wilson said. Customers "pay for as much CRM as they use in a hosted environment for as long as they want to use it," he said. Microsoft charges partners a base monthly fee. Pricing will be announced next month.

Wilson expects hosted prices to vary depending on the amount of customization done by partners for particular industries, such as financial services, and regions.

By relying on a partner network, Microsoft's hosted CRM model differs from that of hosted pioneer Salesforce.com, Wilson said. "Our model is to have a lot of people offering highly tailored solutions in local markets. A lot of the other hosting models (from competitors) have more of a model of one-flavor CRM that they think everybody ought to use, and there's not much chance to add custom extensions."

Salesforce.com's chief executive, Marc Benioff, disputed that notion. He said the company's CRM offering is customizable and that a new service being introduced soon will extend that capability. "Our customers are not just customizing fields and tabs--they are building their own applications across a wide range of functional areas," Benioff told CNET News.com.

Salesforce later this year plans to launch a new product, called AppExchange, that will allow customers to share customizations and add-on features. "When the AppExchange goes live later this quarter, (customers) will be able to buy and share applications with partners and other customers," Benioff said.

 

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