Is Microsoft Dynamics CRM 2011 Catching Up to salesforce.com?

by Jim Berkowitz on January 10, 2011

Microsoft is on the verge of releasing the new version of its CRM product, Microsoft Dynamics CRM 2011 at the end of January.  Similar to the existing release, Microsoft Dynamics CRM 2011 will come in two versions:  Online (Microsoft’s “Cloud”-based offering) or On-Premise (Microsoft’s version of CRM that is installed on your own or a Partner’s Windows IIS and SQL Servers).

This is the first major version update since the release of Microsoft Dynamics CRM 4.0 in 2007.  A lot of updates and changes have been made to the platform and it’s obvious that they have been studying salesforce.com for the last few years while they have been designing and developing CRM 2011.

Is Microsoft catching up to salesforce.com with its Dynamics CRM 2011 release?

In my opinion, Microsoft IS catching up, albeit slowly.  It still has a lot of work to do in a number of key areas. Cloud Computing, Mobile Computing, Collaboration and the Application Marketplace.

However, based on history, catching up is the Microsoft way.  Unlike salesforce.com, they rarely innovate.  But when they commit to a market, (like they did with business productivity software and PC networks), and like they apparently are doing with Dynamics CRM, they often end up as one (if not the) leader in that market…

Cloud Computing

Arguably, salesforce.com and Amazon are the current leaders in the cloud computing platform marketplace.

But, on the plus side for Microsoft, they are more committed then ever to the cloud and its cloud services platform “Azure.”  As noted recently by Josh Greenbaum, “Microsoft is setting up a strong case for contending for a big chunk of the (cloud services) market…. and Dynamics CRM is already queued up to be the #1 app in Azure.” To quote my friend and mentor, Paul Greenberg, “Microsoft Azure is a truly competitive cloud infrastructure… and as far as I’m concerned, Microsoft’s ace in the hole, when it comes to regaining market position in 2011 and beyond.”

On the down-side though, Microsoft Dynamics CRM currently does require some configuration and in some cases some custom coding to integrate with Microsoft’s other cloud-based solutions such as SharePoint Online or Microsoft BPOS (Microsoft Business Productivity Online Suite).

Mobile Computing

Microsoft is also making progress as far as mobile computing is concerned; a key growth area for CRM in the next couple of years. Eric Zeman recently wrote that “speaking at an event in Hong Kong, Michael Dell noted the feedback he’s hearing from developers is that working with Microsoft’s code for Windows Phone 7 platform was less of a pain in the rear than working with Google’s Android platform.”

Paul Greenberg was no less optimistic in his view of Microsoft’s Windows Phone 7 Platform when he wrote:

“Aside from getting Windows 7 right (for a change), they got Windows Phone 7 mostly right too. Windows Phone 7  is not just a huge technical upgrade over all prior Windows mobile operating systems but its user interface reflects the communications paradigm shift that supports the current social consumer’s behaviors.  It might be the best organized interface of all the mobile systems (sorry iPhone lovers, Android folks – I use both of them but Windows Phone 7’s appeal is undeniable). It lays a foundation for the mobile CRM apps that are critical the future of Social CRM.”

salesforce.com’s offers a platform agnostic mobile CRM offering that runs on virtually every popular device (iphone, ipad, Android, Blackberry, etc.) and has native versions for the iphone, Blackberry and soon Android.

Microsoft on the other hand, while it does render on any mobile device with a web browser using Microsoft Dynamics CRM Mobile Express, it does not currently offer a very rich user interface.

My guess is that if the new Windows Phone 7 platform does indeed take off as expected, then we will soon see a more robust and pleasing to work with Mobile Dynamics CRM offering for this phone platform.

Collaboration

Salesforce’s Chatter, an internal enterprise collaboration tool that looks and works similar to Facebook, has been a hit with its customers.  More then 67% of salesforce.com’s 87,000 customer base has already adopted it. With the release of Chatter 2, salesforce.com has improved the product  with the addition of filtering; the ability to fine tune what you see in each activity stream.  When combined with salesforce.com’s Sales or Service Cloud 2 services — it’s collaborative power is truly unleashed. To encourage users to give a try, salesforce.com now offers a free version of Chatter.

Microsoft is clearly behind in collaboration tools for its Dynamics CRM solution.  Although Microsoft points to the integration of their instant messaging platform (Microsoft Lync / Office Communicator) with Dynamics CRM as “collaboration,” this seems to be nothing more than a CRM user’s presence appearing within the Dynamics CRM screens.

Dynamics CRM does not track or store these instant message conversations.  All instant messages appear completely outside of Dynamics CRM and have no tie / association with any of the CRM data contained within.

Microsoft also touts the social / collaboration functionality that SharePoint provides. But again SharePoint is something that you have to buy, install and maintain separately from Dynamics CRM.

Application Marketplace

Launched in 2005, salesforce.com’s AppExchange (its marketplace for cloud-based business applications) has been an unmitigated success.  With almost 1,000 applications from more than 450 independent software vendors, the AppExchange offers a plethora of add-on functionality and vertical industry applications.

In addition, salesforce.com’s developers platform, force.com, has also been enormously successful.  More then 185,000 custom applications have ben built by more then 300,000 developers.  With the purchase of Heroku,  a “Ruby on Rails,” open source cloud-based Java development platform, salesforce.com will definitely attract many more developers to its platform.

In the summer of 2010, Microsoft announced its answer to salesforce.com’s AppExchange, the Microsoft Dynamics Marketplace; an online catalog of solutions, including industry-specific applications and extensions from both Microsoft and its partners.

Microsoft has a tremendous number of independent software vendors, global system integrators, value-added resellers and others partners. Accordingly, I expect that it won’t take long for the Microsoft development community to offer a formidable challenge to salesforce.com in this area.

Summing It All Up

Having literally pioneered the “business on the web” marketplace, salesforce.com has rapidly built a strong business around its commitment to be the #1 cloud computing company for businesses of all sizes.

It’s largest competitors, (Oracle, SAP and Microsoft) have been slow to respond but are all working hard to catch up with salesforce.com’s software-as-a service models for business solutions and cloud-application developers.

Is Microsoft catching up to salesforce.com with its Dynamics CRM 2011 solution–without a doubt.

Does salesforce.com have anything to worry about?  I don’t think so.  salesforce.com has always been a visionary, innovative company, while Microsoft has been happy to follow.  Quite frankly I don’t see that changing any time soon, if ever.

{ 2 comments }

Neil Benson January 11, 2011 at 3:37 am

Hi Jim, great article. As a Microsoft Dynamics CRM partner, I respect salesforce.com and the success that it has enjoyed. Of course, there are lots of smaller points of differentiation between salesforce.com and Dynamics CRM but one of the big ones you didn’t discuss was the pricing.

Have you seen the standard and promotion pricing that Microsoft has published for CRM Online? Any thoughts about whether prospects evaluating salesforce.com and CRM Online might be influenced by the costs?

Jim Berkowitz January 11, 2011 at 8:36 am

Hey Neil–Thanks for your comment! Yes–I’ve seen the Microsoft Dynamics CRM 2011 Special Promotion and Standard pricing. Microsoft is obviously being aggressive in this area.

But when evaluating and comparing any two, or more, CRM Suite solutions like salesforce.com and Microsoft CRM, the total cost of implementation (and ownership) is where one should focus.

First you have to consider critical functionality requirements. If one solution includes all of your needed functionality while the other will require additional add-ins, modules, or third-party apps, this must be considered.

Second, you need to look at your existing technology infrastructure. Obviously with Microsoft, if you already have most of their infrastructure in place (SQL, SharePoint, Mobile Express, etc.), then great! If not, however, the cost to implement Microsoft CRM can quickly mount.

Finally–because CRM Suites are a fairly mature market, products like salesforce.com and Microsoft will offer much the same, functionality wise. The important thing to remember is that its not “what” these solutions do… its “how” they do it. You need to carefully look at how key processes for your organization will work within each solution. How close is each to working the way you want to work… Evaluating this will give you an idea as to how much time, effort and skill will be needed to configure and customize each solution to meet your specific needs. Again, these costs can add up to significant amounts if you’re not careful.

So, even though Microsoft’s Dynamic CRM 2011 per user service cost is less then salesforce.com’s–there’s much more to consider before assuming that, in the end, it will actually be less expensive to implement.

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