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Microsoft Goes Cheap with Dynamics CRM Online

You can almost hear them now — those marketing guys in the Microsoft corner offices — gotta beat the competition…no…gotta squash the competition…How can we do it? Better product? No…cheaper prices…yeah!

At least that’s how we think it went when Microsoft was laying out it’s strategy for the release of Microsoft Dynamics Online.

CRM — Customer Relationship Management. The domain of veteran software provider Salesforce.com. CRM is all about finding and developing customer relationships and growing them to make money. They say in CRM that “knowledge is power”.

Microsoft now seems ready to make an attempt to take some of that power away from Salesforce.com by offering an online version of their CRM product, Microsoft Dynamics.

“Microsoft Dynamics CRM Online combines the power of online services with the richness of your everyday productivity applications.” At least it does if you use Microsoft Office.

There are two versions of the online solution offering: Professional and Professional Plus:

Microsoft Dynamics Professional

The Professional version has the following features:

• 5 GB of storage
• 100 configurable workflows and 100 custom entities
• Security Access via Windows LiveID
• Access to the online application using both Outlook and the browser
• Sales, Service, Marketing, Workflow and System Customization are included
• Integration via Web Services SDK

Dynamics Professional Pricing
There’s currently a promotional price of US$ 39/user/month. This will end on Dec 31, 2008 after which the regular price of US$ 44/user/month will take over.

This pricing looks pretty good up against Salesforce’s Professional Edition pricing of US$ 65 per user per month and 1GB of storage.

Microsoft Dynamics Professional Plus

The Professional version has the following features:

• 20 GB of storage
• 200 configurable workflows and 100 custom entities
• Security Access via Windows LiveID
• Access to the online application using both Outlook, the browser and Offline
• Sales, Service, Marketing, Workflow and System Customization are included plus some additional customization and workflow rules. And of course the offline synchronization
• Integration via Web Services SDK and Offline Data SDK

Dynamics Professional Pricing
There’s doesn’t appear to be promotional pricing for this version of the service. This version has a regular price of US$ 59/user/month.

In an interview with eWeek, Bill Patterson, Microsoft’s director of product management for the online CRM package said there are already over 500 organizations using the Online CRM as part of an early release program.

“For some of these businesses this is their first CRM system; for others, they are replacing other CRM investments such as Salesforce.com” and Oracle’s Siebel CRM On Demand package, Patterson said. Interest in the Microsoft product isn’t limited to small and mid size businesses, he said, but departments and divisions within large enterprises are also showing an interest.”

In addition to competition from Salesforce.com, Dynamics CRM Online may also see Zoho’s new CRM product cut into their sales. Zoho’s pricing of their Professional Edition coming in at US$ 12/user/month and 250MB of storage. Even their enterprise edition is cheaper at US$ 25/user/month and 500MB of storage.

The storage limits are much lower with Zoho, so the questions an organization will have to answer before they make a selection is how much storage they need and how much they want to pay.

If you aren’t sure Microsoft Dynamics CRM is the right choice for you, give a try free for thirty days.

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