Microsoft Dynamics CRM 2011 is Poised to Succeed

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Microsoft was kind enough to invite me to their Microsoft’s Dynamics Fall Analyst Event – a 2 day event packed with product, strategy, customer and partner information. Their focus was clearly on Microsoft Dynamics CRM 2011. This product and their go-to-market strategy are poised to be a game changer. Here are my thoughts:

  • The Dynamics CRM 2011 product is good. Today, Microsoft Dynamics CRM is used by 23,000 customers, 1.4M end-users in 80 countries and 40+ languages. That in itself is impressive. However, Microsoft wants to do better. They have focused on the user experience and UI in the 2011 product in hopes of driving increased adoption. And it will succeed. Dynamics CRM 2011 is deeply integrated with Outlook, Office Communicator, SharePoint, Office 365 and Bing. It can be easily personalized. A business user, without the help of IT can set up a dashboard. It has rich reporting analytics. It works on mobile devices including the iPhone. Microsoft realizes that this product still has limitations, especially around web self-service capabilities. Their near-term plans are to address this, as well as adding capabilities around support for the phone channel and for social customer service.
  • But, it’s not about the product. Microsoft emphasizes that it’s the solution that matters, not the product. Their solution is the product customization that their partner network brings to solve the exact business pain that their customer is experiencing. The 10,000+ partner network, starting October 2011, will need to meet increased requirements to become a silver or gold partner, or to qualify for an industry-badge. The new gold partners are the ones who offer best class solutions, and industry partners will offer validated vertical solutions. This new “re-certification” ensures that qualified partners deploy their CRM solutions with success.
  • Deployment choice abounds. CRM 2011 is available on-demand and on-premise, and shares the same code base. This means that prospects can initiate a proof of concept on-demand, then implement on-premise – or vice versa. The takeaway is that the on-demand product is not a watered down version of their on-premise suite, and Microsoft offers a robust, global SaaS offering to allow users to have full control over their deployment choice.
  • CRM 2011 is an absolute bargain. Microsoft is advertising promotional pricing on its on-demand CRM product starting at $34 per user per month. This is well below list price for Salesforce.com, and Oracle OnDemand and puts pricing pressure on these vendors. This pressure is especially significant in the CRM suite product space, where all vendors offer mature products with robust capabilities. It will be interesting to see whether a pricing war emerges in the next months.

During the analyst day, Microsoft reiterated their 4 differentiators: choice (on-demand vs. on-premise), value (total cost of ownership), productivity (seamless continuity of work as emphasized in the integrations that CRM 2011 supports) and their partner ecosystem. They have the market presence and reach to carry this off.

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