Dynamics CRM Online now available

Microsoft will announce Tuesday that Dynamics CRM Online, the Microsoft-hosted version of Dynamics 4.0, is generally available in North America.

Early access customers have been using the anticipated on-demand offering for months. It will compete with the likes of Salesforce.com, which just made a high-profile announcement regarding its integration with Google Apps.

[ Learn more about the integration of Google Apps with Salesforce.com's salesforce automation tools. ]

"Our own datacenters are now up and running, and we're open for business," said Brad Wilson, general manager of Dynamics CRM, in an interview.

Dynamics 4.0 is also available in partner-hosted and on-premises forms. The three versions employ a common code base, meaning users can move easily from one mode to another, according to Microsoft.

Microsoft has no plans yet to offer CRM Online outside of the U.S. and Canada, although international expansion is "under consideration," the company said. Some of its overseas partners already offer hosted CRM services using Microsoft's software, it noted.

CRM Online, which was recently renamed from CRM Live, comes in two pricing ranges. The Professional edition provides 5GB of storage and costs $44 per user per month. Microsoft is running a special through the end of the year that charges $39 per user.

The Professional Plus edition offers 20GB of storage and is priced at $59 per user per month. "The only real functional difference is, Professional Plus gives you offline [data synchronization]," Wilson said.

Customers will also have access to a Web services-based SDK for conducting integrations: "You might have a portal built in any kind of technology you want. You can reach out to our system and pull data into your portal."

The pricing includes "full-suite" CRM, Wilson stressed: "We don't nickel and dime you, we don't charge you anything to turn on marketing."

This is a key detail of Tuesday's announcement, said China Martens, a senior software analyst with The 451 Group.

"What's new is Microsoft saying that that cost will include full CRM -- salesforce, service, and marketing automation -- that will make the pricing very aggressive," Martens said by e-mail.

While other SaaS (software as a service) providers "pack a lot of additional charges on top of their base prices," she said, "Microsoft isn't doing that, which is a cool and important differentiator."

With CRM Online, Microsoft is also changing the way it has traditionally done business, as it has traditionally sold its CRM offerings through partners, not directly to customers.

Wilson stressed that the channel will play a key role in the launch.

"I firmly believe that customers have a better experience with CRM when they involve a knowledgeable partner," he said. "Our partners have a tremendous amount of domain experience. ... Certainly people will want to self-provision, and we certainly want to enable that. But there's more to CRM than turning it on."

He also noted that partners will play a role in building out custom workflows, objects, and entities for customers.

But the 451 Group nonetheless anticipates channel conflict, despite Microsoft's efforts to avoid it, Martens said. "While Microsoft is compensating partners who bring in sales for CRM Online to the tune of 10 percent of the annual license revenue in the first year and 15 percent in the second year, Microsoft is also driving hard here to get business."

To that end, Microsoft's move into on-demand CRM has prompted speculation over whether it will also introduce a similar offering for ERP. The company has nothing to announce at this point, Wilson said.