Microsoft Sees Pricing as Key to Success of Dynamics Live CRM

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Aiming to be the Wal-Mart of on-demand CRM, Microsoft is just about ready to start releasing versions of its Dynamics Live CRM suite at the low, low price of ... well, as usual, the pricing details are not that simple, but we'll get to that. Suffice it to say that one of the benefits of being the last to the game is that you get to scout out the other players. And then you get to set your prices below theirs to make up for lost time.


Will it help get companies on board with a suite that has gone through years of integration of disparate systems and some pretty bad reviews, all while powerhouse Salesforce.com has fine-tuned its popular hosted CRM offerings and open-source choices such as SugarCRM have been making inroads with small and mid-size businesses through low costs and customer-friendly channels like SugarExchange?


A Computerworld piece today quotes Gartner analyst Michael Maoz as saying it has a "slight chance." Enterprise Applications Consulting analyst Josh Greenbaum counters with the opinion that it has "a chance for a decent amount of success." The reticence around more positive predictions is mostly centered on its late entry to the market.


Wal-Mart maintains its position in retail sales by, as one employee once told me, "using really, really big trucks." In other words, of course, volume, volume, volume. Microsoft plans to pump up its volume with a program for partners, who will exclusively sell and support Dynamics Live CRM, and receive 10 percent of the revenue.


The Dynamics Live CRM Professional version will actually be available free initially, then switch to $39 per user per month in 2008, and then to $44 per user per month, as outlined fairly clearly at PCWorld.com.


The Enterprise version will be released next year, the company says, at $59 per user per month.


Attractive pricing aside, Microsoft doesn't seem to have budged from its belief that customers want it to provide them with three CRM choices -- a traditional installation, partner hosting, or Microsoft hosting -- a stubborn strategy component that seems somewhat out of line with the streamlined, easy and lightweight software-as-a-service option that firms are leaning toward in large numbers -- especially SMBs that will be the target market for Dynamics Live CRM.