Microsoft opening CRM app store

The marketplace, which echoes Salesforce.com's AppExchange, is part of an upcoming CRM release

Microsoft plans to take a cue from rival CRM (customer relationship management) vendor Salesforce.com with the upcoming release of CRM 2011, by adding a marketplace site where partners can sell complementary applications.

CRM 2011 will be available in beta form in September, starting with the Online edition. The Dynamics Marketplace, which echoes Salesforce.com's AppExchange, will go live that month as well. Beginning with the Online version, the application will be generally available by the end of the year, according to a spokesperson.

Microsoft will also expand geographic availability of CRM Online to 40 markets by the end of the year, adding Australia, Brazil, Colombia, Costa Rica, Chile, Cyprus, Peru, Trinidad and Tobago to the list.

The core CRM product is getting a range of updates as well, including "role-tailored" interfaces that correspond to a user's job, as well as improved integrations with Outlook, Office and SharePoint.

CRM 2011 "has been brewing for a long while," but independent software vendors seem keen to work with it, said 451 Group analyst China Martens via e-mail.

The Dynamics Marketplace is an "important integration, since one of the reasons some customers talk about going with Salesforce.com is being able to easily identify a whole ecosystem of complementary apps and extensions around its CRM -- something Microsoft does well to emulate," she added.

Microsoft is also wise to keep strengthening ties between CRM and Office, since Salesforce.com can't compete as well there, Martens said.

But one aspect of CRM 2011 -- its pricing model -- remains unclear. Microsoft has been "pretty aggressive" in pricing CRM Online compared to Salesforce.com, Martens noted.

Along with the fact that customers can also choose to deploy its CRM application on-premises or via partner hosting, if Microsoft keeps up with the pricing pressure it has a strong competitive case against Salesforce.com, she added.

Microsoft plans to release pricing information at a later date, according to a spokesperson.

But overall, Microsoft has a tall mountain to climb before it topples Salesforce.com. The latter is the largest sales automation software vendor in the world, with US$885 million in related applications revenue in 2009, according to a recent report by analyst firm IDC.

Oracle and SAP took up the second and third slots on IDC's list, with $820 million and $642 million, respectively. Microsoft came in fifth with $139 million.

The IDC figures do not include "service revenue derived from training, consulting, and system integration that is separate (or unbundled) from the right-to-use license," according to the report.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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Chris Kanaracus

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