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on demand crm Microsoft Dynamics CRM Software Review

Products and Pricing

Microsoft Dynamics CRM version 4 is delivered in any one of three deployment options and with multiple editions or offerings.

On Premise Installation

On premise CRM software installation consists of the traditional perpetual software license procured as a shrink wrapped product from Microsoft directly, through a retail outlet or from a Microsoft business partner. On premise software procurement means that you must also acquire and maintain the hardware that runs the software. With on-premise software installation, most buying customers fail to recognize the infrastructure and labor associated with servers and other equipment and therefore dramatically underestimate the total cost of ownership (TCO). Software pricing varies based on the edition, modules selected, user count, bundled offerings who you buy it from. Dynamics CRM software also requires licensing of the Microsoft Small Business Server, which comes with its own costs and constraints on how it should be deployed, configured and managed.

As with many Microsoft programs, Dynamics CRM 4.0 comes in three editions:

Software Edition Software Features Targeted Market
Workgroup Edition Maximum of 5 users. This edition can only be deployed on one server for a single entity. Small business
Professional Edition Unlimited users. This edition can only be deployed for a single entity. Middle Market
Enterprise Edition Unlimited users. This edition can be deployed to multiple entities or a single entity on one or more servers. Enterprise

The advantages of the on premise options include the ability to integrate the CRM application behind your company firewall and link to your own custom applications or pages without consideration of web-based XML or other web services. There can also be integration advantages with your in house Exchange server or leveraging MS development tools such as Visual Studio and the .NET framework. Onsite installations do not normally require you to make changes to your Exchange or Active Directory Environments, which have caused concerns for many CIOs who have wrestled with unwinding such changes in the past. The disadvantages of an on premise CRM software installation are the up front costs for the licensing, recurring maintenance expense, infrastructure investments and ongoing administrative support costs that are part of any on premise business application.

Dynamics CRM Live

Microsoft CRM version 4 can be acquired as a software as a service directly from Microsoft in North America or from Microsoft hosting partners internationally. The CRM Live software permits the company to achieve SaaS advantages historically only available from on-demand CRM vendors such Salesforce.COM, RightNow, Aplicor, Netsuite, Entellium, and others. The hosted solution delivers the same feature sets as the on-premise software with the exception of integration and hosting of custom web pages. The SaaS delivery model allows you to rent user licenses on a per seat basis each month and avoid infrastructure, maintenance and in-house IT support costs.

Microsoft CRM Live is offered in two editions:

Software Edition Software Features Price * Targeted At
Professional Broad CRM functionality; 100 workflows and customizations; Outlook integration. $39/user/month Small business
Professional Plus All the features above, as well as added data storage (20GB versus 5GB for Professional), Offline Synchronization, 100 additional customizations and workflow rules. $59/user/month Middle Market

(*) Prices are published on Microsoft’s website as of the writing of this paper and subject to change.

The primary difference between the two Live software versions is that the Plus version offers Offline Synchronization. This version installs a local copy of SQL Server 2005 on each users laptop or PC and downloads a subset of the program and data from the online application to your local PC. This facilitates users to access their CRM system in an offline mode and later sync back to the online version when a connection is reestablished. This is a common capability from other SaaS CRM vendors and may be highly desirable if you employ a remote workforce with limited Internet connectivity.

Primary advantages of the hosted or SaaS alternative include elimination of the up front software purchase, an accelerated implementation (as there is no software to install), a reduction in infrastructure costs and a reduction in IT staffing expense. SaaS solutions may also provide increased alternatives which affect the time to implement and configure a customer relationship management solution. When software doesn't have to be purchased in advance (contributing to the excessive 'shelfware' problem) and instead only provisioned on-demand, users are more easily afforded a phased approach in their implementation planning. As long as there is a high speed internet connection available and an IE browser on your PC, you can access CRM Live from anywhere at anytime, just as you can with any SaaS based product. SaaS also facilitates a try-out or pilot of the system to validate requirements and design assumptions before making the purchase commitment required in an on-premise implementation.

One area of caution with the CRM Live option is that Microsoft, albeit a giant in the software industry, is a newcomer to the SaaS industry and it can often be difficult to separate the hype from the reality with Microsoft. The software giant has committed to spend over $1B on data centers and infrastructure however the uses for that infrastructure are unclear. While they have the resources to deploy software in this way, they may not have the requisite experience to deliver and manage mission critical business systems it the same way several other SaaS vendors have done and refined over the last several years. While Microsoft is generally quite accomplished at figuring things out over time, providing access to business critical CRM applications is not the same as having a connectivity issue with a Sharepoint site. As has taught many SaaS users, being associated with a giant in the industry does not guarantee performance and reliability.

Partner Hosted

Dynamics CRM 4.0 can also be acquired from and hosted by any one of the many Microsoft hosting partners. These hosting partners are value added resellers (VAR) of Microsoft products and often bundle the hosted service with their own implementation services. The combined flexible hosting options and third party add in products can increase the value you get from your CRM software solution as well as the cost that you pay for that solution. While this service closely resembles the CRM Live service offered directly by Microsoft, it can come with other benefits and risks. The number of options and prices for MS CRM are too voluminous to include here so you will have to use Microsoft’s own Pinpoint services to find the hosting partner that best meets your needs.

The primary advantage of the partner hosting option is that you can work with a local hosting company that can deliver product knowledge along with hosting setup and configuration services. You can also negotiate to include other services, options and service level agreements (SLA) as part of your agreement that are generally not available from Microsoft.

The risks with using a hosting partner stem largely from the degree of variability and quality from one partner to another. Even with a (minimal) certification program from Microsoft, there is no guarantee of partner hosted performance or uptime with a third party hosted solution. There are wide variations in pricing and contract terms within smaller regions as well as on country by country basis. There can also be the inevitable finger pointing when dealing with another party - who relies on yet other parties - when trying to get support and information when something stops working. If you decide that a SaaS model is right for you, consider your need for professional services assistance and the options that are most important to you before deciding whether to get the service directly from Microsoft or a business hosting partner. Both are valid considerations and both offer unique benefits and risks.

Software + Services = SaaS?

Microsoft has clearly been called out for its initial disregard for the software as a service (SaaS) movement. In typical Microsoft fashion, the Redmond giant initially chastised the SaaS movement (introducing much FUD) and only conceded to SaaS once the application delivery momentum was bigger than Microsoft itself. Today, Microsoft continues its predictable marketing pattern and suggests that SaaS is 'so two years ago' and now the market has evolved to the newest Microsoft invented marketing phrase of "Software + Services."

As well stated by Computerworld Editorial Director Don Tennant in an article titled "Raining Mud":

"coining a different term so that you can pretend you're the star player in a new and improved variation of the game, while quintessentially Microsoftesque, just confuses the marketplace. Shut up and compete in the same stadium with everybody else instead of trying to draw the crowd onto the Microsoft field."

While Microsoft has finally succumbed to the SaaS CRM software market, the software publisher finds itself late to the party and with several challenges. Microsoft's Dynamics product lines were not developed for thin-client Internet delivery, the software subscription pricing model threatens Microsoft's get-the-cash-up-front revenue model and only a very small portion of the Microsoft Dynamics business partner channel endorses or shows any enthusiasm for SaaS solutions. Expect Microsoft to continue to inject self serving marketing concepts in order to mitigate many of their challenges.

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