Microsoft has launched Microsoft Dynamics CRM Online, a hosted customer relationship management service designed to compete with Salesforce.com.Dynamics CRM Online can be integrated with Microsoft's Office and Outlook applications. The Professional edition, at $44 per user per month, includes 5 GB of storage, 100 configurable workflows and 100 custom entities. The Professional Plus edition, at $59 per user per month, ups those numbers to 20 GB of storage, 200 workflows, and 200 entities, and also includes offline data synchronization.

Microsoft made direct comparisons to the offerings from Salesforce, currently the leader in the field. Salesforce.com's prices start at $20 per user per month, but the "full-featured" version costs $65 per user per month. Microsoft touted the $21 difference between the two high-end packages and also pointed out that its service offers five times the storage capacity and twice the number of configurable entities.

Bruce Francis, vice president of corporate strategy at Salesforce.com, replied, "Storage in a multitenant database is not the same as on your desktop computer. Today, for each edition of Salesforce.com, 1GB of storage is included for each organization, with additional storage available at an extra cost, which is more than enough for the vast majority of Salesforce.com customers."

Sheryl Kingstone, an analyst at Yankee Group Research, said Microsoft is initially aiming the service at small and midsize businesses but eventually plans to scale the hosted software's capabilities to suit larger companies. She said Microsoft has realized that it must respond to mounting customer demand for to access business applications from "the cloud."Computerworld, ChannelWeb