Microsoft plans 'Live' CRM service

New hosted CRM service set to debut next year will be the company?s third service under the Live banner.

BOSTON--Microsoft plans to launch a new hosted CRM service next year under its expanding Live brand.

Microsoft Dynamics CRM Live, an on-demand alternative to its on-premise customer relationship management software, is set to debut by mid-2007 as part of a revamped product code-named Titan.

Steve Ballmer, Microsoft's chief executive, announced the offering here Tuesday at its Worldwide Partner Conference of roughly 8,000 of its business affiliates.

Steve Ballmer Steve Ballmer,
Microsoft CEO

Ballmer made his pitch to the partners on why they should work with Microsoft. "When you leave you have to understand what the opportunity is for (you), and do you want to invest with Microsoft," he said.

The revamped CRM hosting plan was widely expected. Ballmer called CRM Live "maybe the single most inevitable announcement in the history of Microsoft."

The service, the third major category under the Live brand, joining Windows Live and Office Live, underscores Microsoft's ambitions in the business software market. Company executives have said it could represent Microsoft's next billion-dollar business.

Microsoft, Ballmer said, will "move with Live implementations to create a platform out in the cloud that is hostable, is extremely, extremely important."

The hosted CRM service is based on the same code base as the company's traditional on-premise software that customers install within their companies. Microsoft will host the new service within its own data centers, said Brad Wilson, general manager of Microsoft Dynamics CRM.

Microsoft's main rivals in the CRM business include Oracle, which purchased Siebel Systems last year;, which is seen as the leader in the hosted CRM market; and SAP, which launched its own revamped hosted CRM service earlier this year.

Wilson said the move isn't in reaction to SAP or other competitors.

"Our competition is very broad. This announcement is not in response to any particular competitor. It's more of a reaction to an opportunity in market," he told CNET "Our business is growing so fast that some of our partners are working larger deals. We need an easy on-ramp for customers and easier way for partners to get up and running with CRM."

Microsoft did not disclose pricing for the new service. "We will price competitively with what is in the market," Wilson said.

At the Boston event, Ballmer also discussed Microsoft's priorities for the coming year.

"As a company we're entering into a set of new markets--business intelligence, portals and collaboration market; search, from the desktop to the enterprise to the Internet; unified communications, including voice over IP, mobile and other phone devices."

On the security front, Microsoft is shifting from improving existing products to entering the security market "in full force," Ballmer said.

Vista "air cover"
And then there's Vista, the continually-in-development next version of the Windows operating system.

"Vista, you could say, has been a long time in the making--probably a fair statement. But it's absolutely a blockbuster release," Ballmer said. "We will never have a gap between Windows releases like we have had between Windows XP and Vista again. You can count on it."

Microsoft plans to pull out all the stops for the launch of Vista, . A good uptake by consumers, Ballmer indicated, would bode well for adoption of the software by businesses.

"If we have a strong consumer launch, it creates the air cover where people come in and say we want this at work. So this will get massive air cover at both the consumer level and the business level," he said. "We will have big launches for these products around the turn of the year."

Just when Vista will debut is still uncertain. On Tuesday, Microsoft chairman Bill Gates said , and that the company would delay the launch if beta testing revealed significant flaws.

Ballmer also commented on Microsoft's financial performance, with the company's fiscal year having wound down at the end of June. The earnings report for the fourth quarter and the full year is scheduled for July 20.

"We had a good year," he said. "We're waiting to close the books, so I'm not going to make any financial pronouncements. But I say a double thanks in advance of our fiscal-year close. In the era of Sarbanes-Oxley, it gets harder to make these announcements."

In other news, Microsoft on Tuesday announced a new version of its server software targeted at small businesses. Windows Small Business Server 2003 R2 will debut next month and will be priced lower than the previous release, said Steven VanRoekel, director of Microsoft's Windows Server solutions group.

The operating system software is aimed at companies with fewer than 100 employees that don't currently have servers on their networks, or are replacing older systems, VanRoekel said. It includes the Windows Server operating system, a slimmed-down version of the Exchange e-mail software, and tools for building intranets.

The new release adds a tool called Green Check for quickly monitoring server security and overall health, as well as built-in software patch update and management tools.

Microsoft said the standard edition of R2 costs $599 and the premium edition, which adds a workgroup version of the SQL Server database along with security and Web site development tools, costs $1,299. Those prices are 13 percent lower than list prices for the previous version, VanRoekel said.

The company also made changes in how it licenses its Office desktop application software. Microsoft said it will for the first time allow PC makers and system builders to pre-install and sell Microsoft Office Home and Student 2007, which was previously was sold only at retail.

Also, PC makers are now allowed to install a free 60-day trial of Office on a new PC, and sell Office licenses after the PC purchase. Previously, PC makers were only allowed to sell Office licenses at the time of PC purchase.

Microsoft said more than 50 percent of small businesses purchase Office separately within 60 days of buying a new PC.

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