By Erika Morphy CRM Buyer Part of the ECT News Network
10/24/07 8:24 AM PT
Microsoft is significantly lowering the price of its CRM Live application for its partners. "Any time that a vendor cuts prices for its partners it is about helping to make the partners succeed at selling your products," he told Charles King, principal of Pund-IT, adding that Microsoft's recent offerings in this space may not have sold as well as the company had hoped and this is one response.
Success is just a matter of knowing the right "secrets." Download the free eBook, "The Edge of Success: 9 Building Blocks to Double Your Sales." You will discover the fastest, most effective ways to grow your business and still have time to live your life.
Microsoft (Nasdaq: MSFT) has cut by almost half the cost of its CRM Live application for partners, bringing its price point down to US$15 per user per month.
The price cut, of course, is part of Microsoft's ongoing support for its partner network that the company must leverage to make inroads in the Software as a Service space. A drop in price would also encourage developers and partners to build on top of the Microsoft platform, thus increasing adoption organically, or in Web 2.0 jargon, virally.
Bigger Company, Better Margins
Providing better margins to partners and developers to encourage adoption is the chief aim behind the price cut, Yankee Group Analyst Sheryl Kingstone told CRM Buyer.
"Microsoft is using their platform to empower vertical solution providers to build on top of it, cost effectively," she said. That has been Salesforce.com's (NYSE: CRM) go-to-market approach for the last few years as well, but the two companies' offerings do not compare that easily.
At $15 per user, Microsoft is the cheaper application, but as Kingstone pointed out, that price point doesn't include management, hosting fees or a datacenter.
"Microsoft is not providing the hosting, which is why it is so cheap," she explained.
For these reasons, the Salesforce.com option might be a better play for smaller partners. Larger system integrators, with a datacenter already in house, would find the margins to be higher with the Microsoft platform, all things being equal, Kingstone said.
"Some of the larger customers already have the necessary infrastructure investment in place, such as the larger telco houses," she added. "For these companies, building CRM apps on top of the Microsoft platform would be ideal."
Driving Sales
The drivers behind the partner price cut might include more fundamental factors as well, speculated Charles King, principal of Pund-IT.
"Any time that a vendor cuts prices for its partners it is about helping to make the partners succeed at selling your products," he told CRM Buyer, adding that Microsoft's recent offerings in this space may not have sold as well as the company had hoped and this is one response.
"The Software as a Service space has changed quite a bit over the last several years. There are a lot of both vendors and potential customers interested in it now."
The Microsoft Dynamics CRM on-premise and partner-hosted applications have reached more than 11,000 customers, including 475,000 users, according to Microsoft. Its latest iteration of Microsoft Dynamics CRM, codenamed "Titan," uses a single multi-tenant code, allowing partners and customers to deploy both online and on-premise.
Shopping Cart Options for SMBs, Part 2 October 23, 2007
"Businesspeople have precious little time to learn complex systems and then to use them so it needs to be easy and accessible. Whenever possible I try to use the following guide when designing the systems: You shouldn't need to read a manual to know how to use it -- it should be self-evident," said Daniel Vidoni, e-commerce software consultant and proprietor of Vidoni.com.au and Storefinder.com.au.
Related Stories
Microsoft Eyes Enterprise With New Mobile Server October 23, 2007
Microsoft made multiple announcements at the CTIA conference Tuesday, notably the Microsoft System Center Mobile Device Manager 2008, a mobile-dedicated server solution that helps companies manage Windows Mobile phones the way they do Windows-based PCs. The company also unveiled a strategic alliance with Enterprise Mobile.
Microsoft Ends Resistance to EU Antitrust Ruling October 22, 2007
Microsoft has agreed to comply with all aspects of a 2004 EU ruling's penalties. "At the time the Court of First Instance issued its judgment in September, Microsoft committed to taking any further steps necessary to achieve full compliance with the commission's decision. We have undertaken a constructive discussion with the commission and have now agreed on those additional steps," the company said.
Related News Alerts
More by Erika Morphy
Cisco Adds New Technologies to Collaboration Tool Chest November 09, 2009
Cisco has launched new collaboration tools designed to make it easier for businesses to work closely with their partners without creating security risks. They also provide a receptive platform for the increased use of video and social media in the enterprise. Cisco introduced three new network devices to support the collaboration tools.
Windows 7 Flies Off the Shelves November 06, 2009
Early sales figures on Windows 7 boxed software suggest a high level of consumer enthusiasm for the OS. Unit sales were a whopping 234 percent higher than Vista's out of the gate. The revenue haul was not as impressive, as Microsoft offered sharp discounts to spur presales. Also, sales of PCs with Windows 7 preinstalled have been lackluster -- but October is historically a weak month for PC sales.
Southwest Doesn't Fool Around November 06, 2009
Either Southwest Airlines had better deals for my favorite route than its competitors or its superior Web site tools made it easier for me to ferret them out. Either way, kudos to Southwest. In the not-so-hot department were the airline's long list of what passengers weren't allowed to do and its very short list of what Southwest was obliged to do for them. Left me feeling a little chilly.
Headline Feeds
Talkback: 
