Microsoft Makes Move in Shaken CRM Market

In a move to generate awareness among larger corporations, Microsoft on Tuesday announced that a broad range of enterprise-scale businesses deployed its customer relationship management tool since it was launched last December.

Microsoft points to Dynamics CRM 3.0 implementations at tax services provider H&R Block, agricultural lender AGFirst, pharmaceutical company Chiesi Farmaceutici SpA and health maintenance organization Maccabi Healthcare Services as proof that its software is satisfying the demands for a solution that meets the needs of diverse global enterprises.

Microsoft CRM has secured other multi-thousand seat deals with large enterprises worldwide and across a wide range of product and service segments including pharmaceutical, food and beverage, and the public sector, the company reported.

“There’s a great opportunity in the market now with so many acquisitions taking place. There’s a vacuum in the market right now,” Kevin Faulkner, director of marketing for Microsoft Dynamics CRM, told CRM Buyer. “At the same time, there is a rising customer demand and a low level of satisfaction with many vendors. It’s a great time for Microsoft to come in with a fresh approach.”

CRM Competitors Wage War

Microsoft Dynamics is a line of financial, customer relationship and supply chain management solutions designed to help businesses work more effectively. Microsoft’s CRM tools work like — and with — familiar Microsoft software, the company said.

Of course, Microsoft is not the only company targeting enterprise customers with a CRM tool. SAP, Oracle and Salesforce.com are also vying for deployments. Given the market conditions Faulkner mentioned, however, it appears that Microsoft could indeed have an advantage in a changing landscape.

In the next few years, SAP will focus on growing CRM adoption within its base of large enterprises and competing head to head with Oracle, said Robert Bois, a research director at AMR Research. Meanwhile, Oracle has significant work ahead to incorporate its numerous CRM components into its Fusion product, Bois said.

Oracle will also focus mostly on larger enterprises in the near term, he added. That leaves Salesforce.com as Microsoft’s biggest competition in the CRM space.

“Salesforce.com only sells CRM through a Software-as-a-Service model, whereas Microsoft is going to market largely with on-premise software,” Bois told CRM Buyer. “However, as Microsoft moves more toward a SaaS delivery model, this will create a good head to head battle with Salesforce.com, while Oracle and SAP duke it out for the large enterprise market.”

Plenty of CRM Pie

After a few years of doldrums, AMR Research reported the worldwide CRM market was worth US$4.8 billion in 2005, up from $4.4 billion in 2004. On-demand CRM — a model in which a third-party provider hosts the software and delivers it as a service over a network — posted a growth rate of 50 percent between 2004 and 2005. It now makes up about 12 percent of the total CRM software market.

The CRM software market is ripe for a shakeup, however. A Forrester Research survey of CRM customers in 2005 found that only 29 percent were satisfied with how easily their CRM applications integrated with existing data applications and sources. Less than half were satisfied that the CRM software met their business needs.

Microsoft has an upper hand and could see greater adoption in the current market conditions, AMR reports. The firm’s customer management surveys find that Microsoft desktop tools consistently rank as the most pervasive customer management technology.

“Microsoft is recognizing that a CRM product that is easy to use — and tightly integrated to the desktop productivity tools that sales and marketing people are already comfortable with — could enjoy a substantial potential market,” Bois said.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories

Technewsworld Channels