Market incumbents in the CRM market have responded to Microsoft's arrival in their space by making it clear that that their new neighbour is not welcome.
Microsoft Dynamics CRM 3.0, launched on Monday, is a new version of Microsoft CRM that tightly integrates with Outlook making it — according to Microsoft — a flexible easy-to-use system that does not require users to learn a new CRM "language".
"We're really pushing a native Office experience, not integration," Brad Wilson, head of Microsoft's CRM business unit, told ZDNet UK in October. "It is truly built into Office and Outlook. [People] want the right amount of CRM to do their job, but which lets them work where they are already comfortable working."
Siebel, self-appointed leaders in the CRM market, attacked Microsoft on this point this week, saying "this latest version is merely an extension to Microsoft Outlook with additional contact management, and is only the second release in three years".
Until Microsoft "begins to invest more into its CRM applications, as we currently see from other vendors who are releasing up to five versions a year, it will continue to be ranked tenth by Gartner", Siebel claimed in a statement.
Hosted CRM vendor Salesforce.com took a different angle in its critique of Microsoft's efforts, saying that Microsoft’s "accepted development strategy has been, for years, to let others innovate and then crash the party late". This time it has "too long", the company said in its own statement.
But a crucial factor in the launch of Microsoft CRM 3.0 is that it is now available as a hosted service for the first time and in direct competition with Salesforce.com. However, there is a difference with Microsoft shying away from moving to a "full" hosted model and instead going through partners.
RightNow Technologies, another hosted CRM vendor, also attacked the basis of Microsoft's hosting model, claiming that Microsoft is not hosting the systems, but instead leaving it to its partners, who "only offer single tenant hosting" it has set itself apart from multi-tenancy hosting which is "the standard for successful software-as-a-service companies".
Talkback
It Might be true that Microsoft crashed the party too late, but they got money.
Microsoft can win wars in the CRM battle field, but not on-demand CRM. While Microsoft has deep pockets, switching to a fully hosted on demand model will hurt its cash flow for a long time and is actually very disruptive.
What they can do however, is buy rivals such as Salesforce.com or perhaps one of the other smaller ones such as Salesnet, Salesboom or others for chunk change. Of course they can't touch Netsuite because the other billionair, Larry owns it.