First of all, you should know I am very Pro-Microsoft. The reality is that if I consult on business solutions that are based on Microsoft technologies than I feel I should consume everything Microsoft so I know what I'm talking about in front of our customers.
Recently I was reading some newswire articles regarding SalesForce.com's view of Microsoft's CRM hosting strategy. I found it interesting on how SalesForce.com was knocking Microsoft for "pre-announcing" their hosting strategy 9 months before it is going to hit the market. They went on to bash Microsoft stating that on-premise software is a thing of the past and that Microsoft lacks vision on where the market is headed. This is not verbatim but it encapsulates the message that was being sent to the market.
Here is my take on how things are shaking out on the market related to the CRM industry.
- CRM was, is, and forever shall be 100% be dependent on user adoption. It does not matter what we as sales people tell our prospects. It does not matter what CEO's of larget software companies tout in the marketplace. The success of CRM products will depend on users adopting the product and getting value out of their investment. Let us face the facts, managing customer relationships is a requirement to stay competitive in today's market. The only reason business buy the product is because every business in the world has customers. If you have customers and you want to stay in business you better know how to manage those customer relationships. So, CRM products will only be adopted if they provide true business value and are adopted by the end user.
- What makes a CRM tool easy to use? Is it the feature set? Is it how it integrates to my daily routine? Is it how I am able to make business decisions off of the information captured within the application? Most likely, it is a combination of all the above.
- Why do I always read about "Hosted vs. On-Premise CRM?" This is such a silly conversation to be having with customers. If a CRM decision is being made solely on where the application resides the red flags and alarms should be going off like crazy. Sure, this impacts the cost of the project and ultimately the ROI but I would also argue that if this is your buying decision you do not have a very high chance of succeeding with your CRM solution. You will dump money into a solution without really understanding the business needs of your users.
- Who wins? On-Premise or Hosted? The answer should be that there is no winner or loser. It should be a choice for the customer. The reality is that every customer has different needs. If you start with the business needs (not IT) than should we not be asking the end users what business problems they are trying to solve and then identify products (solutions) that solve those business pains? If I was SalesForce.com I would be worried that I do not have a vision for how customers buy. SalesForce.com has built their entire business model on the premise that hosted is the only way to buy CRM. If you are a SalesForce.com customer you are required to work within the confines defined by their hosted strategy. You do not have the ability to "choose" the right implementation model for your organization. In fact, if you have selected SalesForce.com you have relinquished the fact that all control over your customer data is being controlled by a 3rd party company and you are at the mercy of their hosted environment and your Internet connectivity.
- Microsoft has looked at this strategy, hosted software - software as a service - ending software, and come at the problem from a much different angle. The current strategy is to provide customers with a "choice." The choice to control the installation of CRM and have it on-premise. The choice to find a certified Microsoft Dynamics CRM hosting provider and have it hosted off-site (yes, this is available today). In the future, Microsoft will provide CRM Live, in conjunction with the Live strategy by Microsoft, out of their own hosting facilities. Keep in mind that hosting software for consumers is not brand new to Microsoft. MSN and Hotmail have been around for years. Microsoft understands how to host software for consumers. The real kicker for Microsoft is that regardless of what you choose the user experience will still be a very rich experience. Even with today's released Microsoft Dynamics CRM technology I can access CRM content using Outlook, Office, SharePoint, Internet Explorer, and any mobile phone that can browse the Internet (including a BlackBerry). This includes reading, adding, updating, and deleting CRM data within any of these interfaces both inside and outside the corporate network. Next year, when CRM Live ships, this model only gets stronger (more innovation from the development team will be available to consumers). How does SalesForce.com respond to that?
At the end of the day, you have an annual IT budget and chances are you have spent a fair amount of those dollars investing in Windows and Office. There are over 90 million Outlook users in the world. If I collaborate all day long using Outlook, does it not make sense that I would want to interact with my CRM data within that very same environment. Finally, if I truly am a mobile user will I not want my CRM data accessible to me regardless of where I am in the world and regardless of my current connectivity state? What is the strategy from SalesForce.com to address the needs of the true Information Worker?
:: Ryan ::