Microsoft Offers Free SaaS To Salesforce, Oracle Customers

Microsoft, which has increased its focus on cloud computing in recent weeks, is now making a big push for its customer-relationship management software-as-a-service. Microsoft announced Tuesday that it's offering six months of free service to customers that switch from Salesforce.com or Oracle CRM On Demand to Microsoft Dynamics CRM Online.

At the same time, Microsoft eliminated the two-tier pricing and feature structure of Dynamics CRM Online. When it introduced the SaaS in April 2008, it offered a base version with 5 GB of storage for $44 per user per month, and a more feature-rich version with 20 GB of storage for $59 a month. Now it just offers a single version, for $44 a month and 5 GB of storage, which includes 200 custom entities and 200 workflows.

By comparison, Salesforce.com offers a professional version of CRM for $65 a month, and an enterprise version (its most popular) for $125 a month. Oracle CRM On Demand starts at $70 a month.

CRM continues to be the strongest and most attractive area for SaaS. The worldwide market for CRM was up 12.5% to $9.15 billion in 2008, according to Gartner. SaaS versions of CRM amounted to 20% of that market, up from 15% in 2007.

SAP and Oracle were the market leaders for the total CRM market; they both offer SaaS but sell more licenses for on-premises CRM. Salesforce.com, which only offers SaaS CRM, was ranked No. 3 with 10.6% of the market, up 43% from the previous year.

Microsoft, which offers both on-premises and SaaS CRM, was the fastest growing company in the market last year: it ranked No. 4 with 6.4% of the CRM market, up 75% from the previous year.

Microsoft also announced Tuesday that it had updated the Dynamics CRM Online service to include free mobile access, enhanced data import, and customizable views. (Since it's SaaS, all customers receive updates at once.)

It's been a busy week for Microsoft in the areas of SaaS and cloud computing. On Monday, it announced it had lowered the subscription prices for its Business Productivity Online Suite, which includes online versions of Exchange, SharePoint, Office Communications, and Office Live Meeting, from $15 a month per seat to $10 a month.

Microsoft has been competing heavily in the area of SaaS e-mail with Google, including a recent competition for 30,000 online e-mail subscriptions with the city of Los Angeles.

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