CRM

ANALYSIS

A Mixed Bag in Orlando

Microsoft Convergence is a very large show. Last week in Orlando, Fla., there were in excess of 9,500 people, most from outside of the United States, and by that measure alone it was a successful event. Convergence is one of Microsoft’s chances to meet face to face with its partners and customers for the usual mix of training, new product announcements and the like, and I went hoping to learn more about the company’s continuing effort to field a relevant CRM solution.

What I found was a mixed bag. First off, Convergence is an ERP (enterprise resource planning) show. There’s nothing wrong with that, but Microsoft has, I believe, four ERP systems, and CRM is a latecomer to the mix. Also, a show like this has equal parts devoted to the products, partners, customers, prospects and press and analysts, and all of the parts are moving, so it’s somewhat difficult to tease out the CRM part.

What I got from the CRM part was this: Microsoft has a very serviceable CRM 1.0 product. By that I mean all the parts for conventional CRM such as sales force automation, marketing and service are there, and the partners and end users are making use of them in creative ways to derive value. However, in a world that is increasingly talking about CRM 2.0, social media, social networking and communities, Microsoft still has some distance to travel. I did get to see some community applications and was told that version 5.0 would have more emphasis on CRM 2.0, but that’s still in the future.

Forcing CRM Into ERP?

Microsoft’s messaging was another matter. I can’t quite describe it, but seems like they are trying to sell CRM as if it is another part of ERP. ERP is inherently inward-looking, and its purview is a limited set of well defined business processes. On the other hand, CRM is inherently outward-looking, its processes are mediated by the vendor and participated in by balky customers, and that difference can be substantial. At a time when most CRM vendors — Salesforce, SAP, Oracle Sage and others– are making visionary statements about engaging the customer in new and different ways, Microsoft’s CRM messaging was filtered through a green eyeshade. For me, it didn’t work.

While we’re on the subject of messaging, it was surprising to me that there was no third-party speaker offering any visionary statements that backed up the company’s primary messages and speakers. The only visionary speeches were the keynotes delivered by Microsoft executives, most notably Steve Ballmer. Microsoft is not the only vendor to avoid bringing in visionary speakers, but I can tell you it makes a difference. Sage, on the other hand, routinely brings in people like Martha Rogers and Joe Pine to talk about the future of business, not computing per se. These speakers get partners thinking about how their businesses need to continue changing and in my opinion it’s worth the effort.

Searching for a Better Metaphor

After a few years in which the company did not have a great deal to show for CRM, they have gone to the other end of the spectrum and can now inundate you with features and functions. Sometimes that leaves an impression that Microsoft CRM is more of a tool kit than a set of solutions. While I don’t think that’s quite accurate, lots of partners make a living customizing Microsoft solutions, so the tool kit impression might have been good for partners but not so good for me.

The company also focused on a couple of things that I don’t think of as important — the centrality of Outlook and the ability of its CRM product to operate behind the firewall in conventional mode or across the Internet in an on-demand mode.

Outlook is wonderful, and I use it, but I am not certain that it makes sense to build the CRM user interface around it. After all this time, there should be other, better metaphors to focus on; if not, the designers in Redmond ought to come up with something –customer microsites for example. It makes no sense to me that the company that completely re-invents the PC operating system every four years can’t come up with a better metaphor for a CRM work environment than e-mail. (Then again, there’s Vista.)

As for the on-demand/on-premises debate, I can understand the attractiveness — even seductiveness — of having both options, and Microsoft has done a good job of building one code set that supports both modes. I can also understand that there are still outposts of the computing world that are not ready to cut the tie with conventional and expensive on-premises computing, and for them the Microsoft solution is brilliant. Nonetheless, I don’t think messaging that positions the future of computing as a choice between two completely equal options is valid. The options are not equal; on-demand is the emerging metaphor.

What I have more trouble understanding is the way Microsoft enables its partners to host on-demand CRM. I was told that Microsoft has no hard rules in place that stipulate things like service levels that the partners must provide. In effect, every partner gets to make its own service level plan, and a Microsoft executive told me the company expects that simple competition will drive higher standards.

As a practical matter, that means one vendor might offer a SaaS (software as a service) 70 Type II data center with mirroring, and another might not. It seems like a big risk for the customer to first understand the differences and then to shop for the better alternative. It is an even bigger risk for Microsoft to be making its software available in such an unstructured environment and to place its reputation in the hands of a Balkanized group of partners with differing service level agreement standards.

I have to say I just don’t get it.

Prime Partner Program

Microsoft Convergence had a good deal going for it. The show was well attended, the show floor was packed with partners and customers looking for solutions and there were many good sessions. The show highlighted the company’s jewel in the crown, which is its partner program. If there’s one thing that Microsoft gets, it’s how to operate a partner program.

There are numerous partner programs in the CRM space right now and, no surprise, some are better than others. The biggest unanticipated consequence of Convergence might be the effect it will have on other partner programs. With credible CRM to complement its multiple ERP solutions, Microsoft may at last be in a position to compete more effectively with CRM vendors that do not offer as many amenities for their partners. If that is true, look for other companies to beef up their partner programs in a hurry.


Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant’s research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and Web site. He is working on a book and can be reached at denis.pombriant@beagleresearch.com.


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