Microsoft will soon start selling Dynamics Live CRM, a hosted service, for $44-$59 per user per month. Seattle Post-Intelligencer's Todd Bishop points out that these rates are significantly lower than the $70-$100+ that Salesforce.com and other SaaS vendors currently charge. Techdirt's Joe Weisenthal thinks low prices won't be Microsoft's trump card. Instead, it's MSFT's extensive partner network that will help make Live CRM a success. But I wonder...
Microsoft did announce Live CRM at its worldwide partner conference. According to CNET's reports, COO Kevin Turner and CRM general manager Brad Wilson worked hard to make nice. Yes, the product's on-premise, partner-hosted and Microsoft-hosted versions share the same code base. And yes, it's possible some end users might want Microsoft and not partners to do the hosting. But "partners of record" who help sign up customers will get a 10% cut of ongoing subscription revenue. That's a much better deal than first-year-only commissions offered by certain competitors.
And Allison Watson, head of Microsoft's worldwide partner program, also did her best to reassure. She notes the possibly difficult changes ahead but promises that Microsoft will point partners in a new direction: "In cases where Microsoft is hosting the software, we’ll clearly outline areas in which partners can participate... As more products become available in the software plus services area, we will continue to define the partner revenue possibilities for each."
But ZDNet's Mary Jo Foley seems unconvinced that "creating partner opportunity is in Microsoft's DNA". She says if history is any indicator, Microsoft won't hold back from pursuing every possible market segment directly.
Think about it: Steve Ballmer is building $500 million data centers. He says he will start selling managed services (such as hosted SharePoint and Exchange, which Energizer has been piloting) "much more vigorously and transparently". And his COO thinks Office Live "has the potential to become one of the three or four most-used Microsoft products".
Somehow I get the feeling that for Microsoft, hosting partners are more of an albatross than a strategic priority. And the wonderful new place that Microsoft wants to help them "move comfortably into" is on the sidelines.
PS - Zoli and Sridhar are right! $59 might be cheaper than Salesforce, but it doesn't undercut Zoho CRM.
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