Update: Microsoft reveals some details of CRM 3.0

Microsoft will release a new version of its CRM (customer relationship management) software around the end of this year. With the new version will come a special edition for small businesses, a subscription-based license for hosting services, and support for more languages, including Chinese and Arabic, Microsoft said on Tuesday.

The software will come with two new modules: one to automate the management of direct marketing campaigns, and one to manage complex personnel and resource scheduling requests, the company said. The new version is a great leap forward in at least one other respect, as the company is moving directly from the existing version 1.2 and numbering the new Version 3.0.

Microsoft is still deciding how the new modules will be priced and packaged, but customers running the higher-end Professional edition and subscribed to Microsoft's Software Assurance maintenance plan will be able to add on the new modules for free, according to Brad Wilson, general manager of Microsoft CRM.

The decision to skip ahead to Version 3.0 reflects the magnitude of the updates, Wilson said. Late last year, Microsoft had been preparing to release Microsoft CRM 2.0, but feedback from partners during the alpha period convinced Microsoft it should delay the software.

"A lot of what our partners had asked for were things that were already in our 3.0 road map," Wilson said. "With this release, we really hit the vast majority of our goals that we announced a year ago."

Microsoft plans to demonstrate CRM 3.0's new capabilities in Amsterdam at TechEd Europe, its conference for software developers, and at its Worldwide Partner Conference in the U.S., both later this week.

The new version includes a treat for reseller partners: Microsoft said it will reduce the time and effort required to create tailored versions of the software for vertical markets, or to integrate it with other applications. Partners will be able to obtain the necessary software development kit for CRM 3.0 through the Microsoft Developer Network later this year.

Customers will be able to buy and run the CRM 3.0 tool in two ways: either as a packaged product they run themselves, or as a hosted service they pay for through the new subscription-based license. They'll be able to change their minds later, too, as the code for the hosted and on-site versions will be the same: only the license will change, Microsoft said.

Microsoft has always made Microsoft CRM available for partners to offer as a hosted service, but that market has remained small. In the U.S., NaviSite is one of the few companies offering hosted Microsoft CRM services. On a monthly subscription basis, NaviSite's hosting prices start at $99 per month for users who already own their Microsoft CRM licenses -- notably higher than the $65 per month starting price of Salesforce.com, the industry's most popular hosted CRM provider.

NaviSite's prices may drop with the release of Microsoft CRM 3.0, according to NaviSite Vice President of Marketing Bernd Leger. The company has been working with Microsoft on software changes that will lower the cost of hosting it by, for example, allowing more software to be installed on each server. Eventually, NaviSite would like to see Microsoft move to a multitenant architecture, allowing multiple instances of the software to share the same infrastructure.

"Our price could definitely come down," Leger said.