Microsoft Makes Its Move–Vertically. Smart.


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Microsoft is an enigma wrapped in a puzzle wrapped in a riddle?

Not anymore. No riddle. No puzzle. The enigma remains kind of handy, though.

They are finally getting much more aggressive with their CRM strategy – though much of it outside the U.S. – and its about time. Its especially revolving around their “LiveCRM” initiative. They announced a whole series of things at their Convergence 2007 conference in Copenhagen this morning at 3:00am EST. (I was asleep, because that’s what decent people do at that hour).

A few were of the ordinary “oh, okay, kind” that are not terribly surprising nor even that interesting. For example, the large outsourcers like Accenture and EDS – both questionable for their treatment of humans and data – are among the ones that will handle the enterprise accounts for Microsoft Live Dynamics CRM.

Ho hum. Too bad those two miserable companies are getting the benefit of Microsoft’s kindness.

But there were some no so ho hum. In fact more on the OH HO!! side of things: or if you prefer the Americanized English version: AH HA!.

These are smart, aggressive moves that Microsoft is making, that is coupled with their Live CRM incredibly intelligent pricing schema – that can truly make them into a powerhouse – one that I predicted a few years ago – though under different scenarios than this one. They will make up serious ground with these.

For example – the one that is the most soothing sight for my bifocal-driven eyes – is their focus on engaging partners, especially overseas, though one would hope soon in the U.S. and Canada too, to host vertically specific versions of Dynamic Live CRM. Non exclusively. The overseas reasoning? They have Dynamics CRM deployed in 80 countries, including 100 seat implementation in Afghanistan among others. I have to admit, in a journalistic lapse more characteristic of me than you could ever imagine, (which is why I’m not a pro – J-school degree or not), I forgot to ask if they have 80 countries deployed with their on demand model, on premise model or a mix.

But someone, Brad Wilson, their CRM jefe, is my guess, came up with the idea of having individual partners flex their vertical specializations by hosting industry-specific versions of LiveCRM – in fields like construction, legal, associations, and whatever else they had the skeletal structure to handle. As far as I know, this is unique when it comes to a broad sweep and large scale. The only professed exception is Verticals On Demand who seem so overfocused on the pharma/medical services industry that they are creating a typecasting that they may never recover from – something like Mr. Bean. Now, if they wanted to be a boutique specialist in health care/pharma, that’s one thing. But that’s not their announced intent to my knowledge – which, of course, could be wrong though reading this from their website: “Verticals onDemand leverages the world’s leading development platform from to deliver onDemand customer relationship management (CRM) solutions for specific industry segments,” makes me think its not.

To the contrary, Microsoft is using its greatest strength, the partner network and spreading the wealth among multiple industry-specific versions, and, unlike others, is giving the bulk of the subscription revenues to the partners. This gives them a big leg up in their drive for on demand relevancy and coupled with the remarkable pricing model of LiveCRM, will accelerate their pace to something important.

Good show, old sod.

Less original and intriguing, but interesting and important nonetheless, is their distribution model so far for the SMB version of Microsoft LiveCRM. For some reason, the primary global distributors seem to be telcos. Which actually makes some sense. My non-disclosure agreement forbids me from telling you who those telcos are (which, is of course, a way for me to say in lovely legal language that I know something you don’t know, nyah, nyah, nyah, nyah!). But what makes the idea of this initial channel interesting is the use of a mobile CRM platform for small business with an infrastructure to support it. Though my conversation with Brad et. al. didn’t tell me that at all. Treat it as pure supposition on my part. Problem with that for now is that Windows Mobile 6 is a pretty “eh” platform and will need a new version that could handle the business tasks better than it currently does. That seems to be in the works too with a speculated arrival of Microsoft Photon in 2008 – the final unification of East and West Germany, I mean Windows Mobile and Windows Smartphone – the PDA/Cellphone integration that we’ve all been waiting for.

Don’t underestimate the potential of this vertical hosting strategy. Microsoft has partners, pricing, industry-specific expertise that they are launching on an incremental scale, but are not limiting themselves to one vertical. In fact, the vertical strategy is as good as the partners hosting it – which is why, given Microsoft’s history with partner networks – it’s likely to be a move that has impact. There is a we’ll-see part to all this, but we may see something that we’ve all been expecting for more years than we should have.

Smart, very smart. I like.

Paul Greenberg
The 56 Group, LLC
Paul Greenberg, the president of the 56 Group, LLC, is the author of the best-selling CRM at the Speed of Light: Essential Customer Strategies for the 21st Century, 3rd edition. Greenberg is co-chairman of Rutgers University's CRM Research Center and executive vice president of the CRM Association. His blog PGreenblog won both of the only two awards ever given to CRM blogs.


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