Online CRM battle: Microsoft declares war

Microsoft has announced that its Dynamics CRM Online software is now available in 40 markets around the world, bringing it in closer competition with Salesforce.com and Oracle's CRM on Demand. In hopes of poaching customers from both companies, Microsoft is offering a number of financial incentives to switchers. New customers that sign contracts by June 30 can receive promotional pricing of US$34 per user per month for the first year.

That compares to $65 and $125 per user per month for Salesforce.com's Professional and Enterprise editions, respectively. Oracle CRM on Demand pricing starts at $75 per user per month. Microsoft is also offering new customers "in most markets" up to $200 per user until June 30 to offset the cost of migrating to CRM Online. Free trials will be available.

CRM Online is based on the on-premises Dynamics CRM 2011, which has been in beta for some time and will be available on Feb. 28. Microsoft CEO Steve Ballmer is expected to discuss the release and the company's CRM strategy during a speech Monday.

The global availability of CRM Online as well as its hooks into Microsoft's collaboration and productivity software "are going to raise the level of competition in general in CRM," said Brad Wilson, general manager of Dynamics, in an interview.

"The value in CRM 2011 is really about the fact this product was designed with the salesperson in mind, not the manager," said Ray Wang, CEO and principal analyst with Constellation Research. Its features, such as deep integration with Outlook and mobile capabilities are crucial to salespeople's day-to-day jobs, he added. CRM 2011 does not match up feature-for-feature with Salesforce.com but "it's comparable from a salesperson's point of view in terms of what they want to do."

The fact that Microsoft is offering on-premises deployment, something Salesforce.com does not, is another potential advantage, he added.

CRM Online is now available in Austria, Australia, Belgium, Brazil, Canada, Columbia, Costa Rica, Chile, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Peru, Poland, Portugal, Puerto Rico, Romania, Singapore, Spain, Sweden, Switzerland, Trinidad and Tobago, the U.S., and the U.K.