A trade press report has suggested that Microsoft has plans to launch a hosted CRM service.
Customers can currently access hosted versions of some of Microsoft’s SMB applications, including its customer relationship management (CRM) application, via a handful of its channel partners, but the company has always said it has no plans to provide a service itself.
However, a report in Computer Reseller News cites two partners who said they have been briefed on the move. An unnamed company source is also cited as stating that Microsoft has a taken on a group of ex-high-availability people from Unisys, Hewlett-Packard, and elsewhere to work on the project.
Microsoft’s official position is that it is unable to comment on the speculation. Its stance is that it offers customers a choice whereby CRM can be delivered as an on-premise solution or a hosted offering, both via its channel partners.
Microsoft’s hands-off hosted position has always been perplexing given its ambitions to be a major player in the SMB market, and the evidence that hosting is an increasingly important deployment model within this sector. Leaving it to a tiny number of its partners is tantamount to dismissing the model, yet to be taken seriously in the SMB sector, Microsoft has to be seen to offer support at a corporate level, and there have been several heavy hints that Microsoft is planning a hosted about-face.
At a mid-market business summit in September, CEO Steve Ballmer said he believed there will be a set of services to interest mid-market and small customers, such as anti-virus and anti-spam software services.
Taking on the software-as-a-service model will present Microsoft with significant challenges, however. As far as architecture is concerned, its CRM application is still single tenant, which presents management issues and undermines the economies of scale that built-for-hosting multi-tenant applications provide. Microsoft’s business applications strategy is also partner-centric so it has to devise on operational model that does not undermine its revenue stream, something hosted newcomer Sage is also having to grapple with.
