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Microsoft revamps CRM software

The company's second version of its customer relationship management package promises expanded language coverage and tighter links to its latest Office and server software.

Microsoft released the second version of its customer relationship management package, promising expanded language coverage and tighter links to its latest Office and server software products.

Microsoft CRM 1.2, released Monday, marks the first update to the applications package since it was introduced last January. The company said it will deliver the software to customers during the first quarter of 2004. CRM software aims to help businesses automate communications with customers to improve productivity and increase sales.

The CRM 1.2 release, which is targeted at smaller businesses, broadens language support from the current English-only package to eight additional languages. Microsoft also took the opportunity to tweak a number of the product's capabilities. The company is planning a more aggressive revamp of the package for early 2005, when it intends to introduce CRM 2.0.

Among the upgrades to CRM 1.2 is support for the company's latest array of business software products, including its Windows Server System 2003, Exchange Server 2003, Office 2003 and Small Business Server software.

Microsoft said it also tweaked the software's user interface and simplified the package's setup and installation logistics. In addition, the new release includes better data evaluation capabilities and improved sales force automation tools, including greater customization in the company's CRM Sales for Outlook software, according to Microsoft.

Holly Holt, group product manager for CRM at Microsoft, said the overall goal with the package was to make it easier for companies to use. She estimated that Microsoft has been able to attract around 1,000 CRM customers thus far. She said that Microsoft CRM 2.0 will add more integration tools and a greater range of features.

At least one Microsoft partner said the CRM 1.2 release will come in handy in marketing the software. Ben Holtz, chief executive of Watertown, Mass.-based Green Beacon Solutions, said his company has fielded a number of calls regarding Microsoft CRM from potential customers and partners located outside the United States. Holtz said his company has closed only a few deals to implement the software thus far, but that interest in the product remains strong.

"I think many people are still looking at it as a version 1.0 type product, but as Microsoft is able to enhance the software, I expect to see more deals close," Holtz said.

One challenge Microsoft faces in reaching the small-business market with its CRM software is the requirement that customers also purchase its Windows Server operating system and SQL Server database software. A Microsoft executive recently said that currently only one-fifth of small companies own a server.

Nonetheless, Microsoft's CRM offering appears to have made some waves among competitors that initially rebuffed the threat the software giant posed as a rival.

Rival midmarket CRM software maker Pivotal, which reported $56 million in revenue in its 2003 fiscal year, recently agreed to a buyout from CDC Software for approximately $53 million.

Despite Microsoft's claims to the contrary, analysts expect the company to gradually increase its focus on CRM for medium-size and larger companies, which would place it in competition with Siebel Systems, SAP, Salesforce.com and Oracle.