Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Seven Questions About CRM Software With Microsoft's Mike Ehrenberg

If it wasn’t already obvious, there’s a bit of a slugfest underway in the market for customer relationship management software. While most eyes are on Salesforce.com and its colorful CEO Marc Benioff, it would probably be a mistake not to pay attention to Microsoft, and its Dynamics CRM. While the two business software giants SAP and Oracle are leading the market in CRM software, Salesforce is obviously growing fast, but Microsoft’s offering is coming up behind.

For example, last week on the day of a big Salesforce conference in New York, Microsoft tried to steal some of its rival’s thunder announcing that a customer it wooed away from Salesforce in 2009 had already saved money since making the change.

Being behind in a market is a good thing for Microsoft, says Mike Ehrenberg, who as a Microsoft Technical Fellow, who leads the work on long term product roadmap for the entire Microsoft Dynamics Group. Microsoft has lately turned to one of its favorite competitive weapons, aggressive pricing, to try and erode Salesforce’s lead. Until June 30 Microsoft is offering $200 to new customers who dump Salesforce or Oracle for Dynamics CRM online, its cloud-based CRM software. And it’s also pricing the service far below the month rates that its competitors charge.

It’s a good time to be aggressive. A recent Gartner survey declared that spending on CRM software would account for the largest share of enterprise software spending in 2011.

During my recent lightning-fast trip to Seattle, I sat down with him to talk mostly about Dynamics CRM and its place in this fast-moving market.

NewEnterprise: What’s it like competing with Marc Benioff?

Mike Ehrenberg: It’s fun. There’s no shortage of excitement. He’s a colorful guy. Nothing ever gets stated in gray areas. Its usually really bright white, and dark black. Microsoft is always good at competing when there’s a named competitor. We think a lot about SAP and Oracle in that space as well, but they’ve both come out with Cloud-based CRM recently. They’re not in the forefront. We think we’re the competitor that Benioff thinks about most often.

So let’s size up the competition. What are your strengths and weaknesses, and what are the strengths and weaknesses of Salesforce?

I’ll talk about our strengths and you can draw the rest from there. I think we just came out with a release that we’re really excited about, CRM 2011. The online version was released last month, and there are a number of things outside the product itself that we’re excited about. For the first time, we shipped online first. CRM was a product we built from scratch but built as an on-premise product. Now we’re at the point where we shipped online first. We have parity between everything we can do in the cloud and on premise, including the full aspects of customization. We’ve also transformed our cadence. We’re off the old three-year delivery cycle. We’re refreshing that service pretty much every six to nine months. But we’re also maintaining the on-premise product and syncing innovation in the online environment into the on-premise one. Choice is something that no one else has. We have the same experience whether its on-premise or in the cloud or hosted by a partner.

I’m hearing a lot about hybrid environments lately, some combination of hosting an application on-premise and in the cloud. Can you handle these mixed environments?

We see a lot of places where people have deployed CRM on-premise, and we’ve now opened up a lot of capabilities for them to customize and extend out of the Azure cloud. Let’s say they want to put a custom portal that puts a different face on the data and functionality they can build that using tools that we give them and run it Azure. The hybrid is going to be the way of the world for everyone for a long period of time. So the ability to extend an on-premise application via the cloud is something we’re really focused on right now. Also the same thing is true with CRM online. You can develop a large custom application on Azure. We think the hybrid capability and the ability to have Azure with its elasticity, is a tremendous advantage for these things.

So is it easy or hard to dislodge installations of the older CRM systems?

It’s funny because Microsoft was one of the very large Siebel installations. Our CRM product was born because our own salespeople just weren’t going to use a product that required them to be sitting at their desk logged in to their PCs. All the thinking about being available through a browser, and through Outlook. And so over time we started winning deployments within Microsoft, and so group by group, people started using CRM instead of Siebel. And then finally a few years ago, we saw a path to decommissioning Siebel, and now we’re just a couple months away from turning off the last Siebel user internally.

What are customers saying they need right now?

Time to value. That’s what’s driving the decision process to deploy CRM. They have to see right away. It used to be that customers paid more attention to the total cost of ownership. But if I have to go into a cave for two years to get to good TCO, the project is going to get killed.

So what kind of time to value are you seeing?

Incredibly rapid on the CRM side. We can provision you a minute. We see people up and operational in days and weeks.

Why would customers be coming to Microsoft versus anyone else for CRM?

This is true not just for CRM but across all of the Dynamics group is that we feel like it’s our role to take all the technology from all the other parts of Microsoft and make them work in the context of the application. We don’t leave it up to a new CRM customer to figure out how to manage all the documents associated with their prospects in Sharepoint. We just do that. If you want to work with a contact, and call them in Lync, it helps not to make the customer be the integrator. It just works.


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