Microsoft sets initial pricing, rollout for CRM Live

Microsoft will allow early access to CRM Live for no fee this year and will start charging for the hosted service in the first half of 2008

Microsoft continues to prepare for the third-quarter launch of its Dynamics Live CRM service with Tuesday's announcement of initial pricing and product information.

Customers in North America will be able to begin using the service free under an early-access program this year, and Microsoft expects to start charging for the hosted CRM (customer relationship management) service in the first half of 2008, according to Brad Wilson, general manager for Microsoft Dynamics CRM.

The software giant made the announcements at its Worldwide Partner Conference (WPC) in Denver. At the same conference a year ago in Boston, Microsoft CEO Steve Ballmer confirmed Dynamics Live CRM would be the vendor's third major Live hosted service, following on from its Windows Live and Office Live software-as-a-service (SaaS) offerings.

Live CRM is one of three deployment options in Microsoft's upcoming "Titan" release of its CRM software. Titan will be the first Microsoft CRM release based on a multitenant architecture, using a single code base to support three types of usage: Live CRM, an on-premise version of the CRM application, and a partner-hosted release. All three deployment options share a common code base. The on-premise and partner-hosted versions of Titan should appear in the fourth quarter of this year, Wilson said.

The company has yet to commit to a launch date for Dynamics Live CRM outside the United States and Canada but does intend to offer the service internationally, Wilson said.

Microsoft's partners have already been hosting Dynamics CRM, and Wilson stressed that the customer early access program for Live CRM will be partner-led, meaning that would-be users have to go through partners to sign up for the service. Microsoft will also compensate partners annually for the customers they sign up for Live CRM. Each year, such partners will receive 10 percent of the annual SaaS subscription revenue per customer. For next year, Microsoft will offer an additional sweetener to partners increasing it to 15 percent.

Microsoft plans to provide a number of different versions of Live CRM. Dynamics Live CRM Professional, aimed at companies with five or more CRM users, will be the first to become available, Wilson said. Professional is the service Microsoft will offer in its free early customer access program this year.

In 2008, Professional will cost $39 per user per month in a promotional price, which will eventually be raised to $44 per user per month. The service will enable users to access CRM capabilities through Microsoft Outlook and browser clients and will include customizable workflow based on Windows Workflow Foundation.

The other Live CRM release Microsoft intends to begin offering in the first half of next year is its Enterprise version, which adds in offline data synchronization on top of the Professional features. Dynamics Live CRM Enterprise will cost $59 per user per month.

"The decision to allow early access to CRM Live for no fee is a pragmatic approach to attracting Microsoft-oriented prospects who have been looking for commodity salesforce automation functionality but have as of yet sat it out," Michael Maoz, vice president at market research company Gartner, wrote in an e-mail comment. "We don't expect Microsoft CRM Live will be generally available to customers until the first quarter of 2008 at the earliest, and then for North American clients only, with subsequent waves for EMEA AsiaPac."

Microsoft's initial focus with CRM Live will be salesforce automation for business-to-business organizations, Maoz said, not customer service in the contact center, Web self-service or field service. Until Microsoft releases a full list of functionality for the service and how much customization of the product it will allow, customers will find it to hard to do "an apples-to-apples comparison" of Live CRM versus existing on-demand CRM from the likes of and NetSuite, he added.'s Group Edition might be the likely rival to CRM Live and a sight cheaper than Microsoft's offering at $10 per user.

" is better focused from a sales and marketing perspective, selling directly and through its growing third-party partners, giving them a strong head start in the market that will be hard for Microsoft to compete with given its current go-to-market strategy, especially its dependence on partners to deliver a hosted solution in addition to the SaaS model -- the hosted offering has only a slight chance of succeeding over the next 18 months," Maoz wrote.

Copyright © 2007 IDG Communications, Inc.