CRM Software solutions are an integral part of the sales, marketing and customer service of most businesses . Today, CRM Software has a wider role to play to manage all business requirements. Microsoft  has called this more expansive scope xRM – (x) anything Relationship Management. Choosing which solution that is right for your organisation is not easy and often companies evaluate different CRM solutions. Two of the major CRM software solutions available to you are Microsoft Dynamics CRM and Salesforce.

There was a time with these two CRM software applications the choice was more black and white. You either looked at software deployed in-house (Microsoft Dynamics CRM) or the software-as-a-service model (Salesforce).

Now that Microsoft has moved into the cloud with a software as a service model and Salesforce now has a development platform with its “Force” offering your options are now blurred .

Salesforce was founded with an objective to create an on-demand information management service that would replace traditional enterprise software technology. Salesforce calls itself “the enterprise cloud-computing company”. Sales Cloud™ and Service Cloud™ are Salesforce’s applications for sales and customer service. Their direction to the cloud computing deployment model has led to them developing the force.com cloud platform. This allows developers and users to build business applications on top of the Salesforce offering .

Microsoft Dynamics CRM, was designed with a long-term vision that will enable customers to use CRM with other Microsoft products and decide on the options to deploy the application based on the needs of the business .

Flexibility & Choice

With a multitenant CRM solution, Microsoft Dynamics CRM gives you many deployment options, depending on your requirements. Microsoft Dynamic CRM can give you partner-hosted solutions, on-demand or on-premise solutions. If your deployment requirements change so too can your Microsoft CRM software deployment as each option is built on the same data model and architecture. For example, you can take your configurations and data hosted by Microsoft and move to In-House or to a Microsoft Partner hosted model.

Salesforce platform offers SaaS by the Cloud and you don’t own the software and configurations. If your needs change to an in-house solution you need to move to another CRM system . You need to factor the cost of getting your data out of Salesforce. Depending on the level of subscription you purchase for Salesforce there have been reports of your data being held hostage. This is, depending on your level of subscription you need to upgrade your subscription in order to export your data.

Cost
Salesforce claims to cost much less but Microsoft Dynamics CRM believes that the comparison is not for like services. A-la-carte pricing that is additional to potential price hikes at contract renewal time can significantly affect the total cost of Salesforce. When assessing comparable online products between the two opponents, Microsoft Dynamics CRM Online is available for less than 50% of the Salesforce fee. The latest pricing in the USA indicates that “Microsoft CRM Online runs $44-59 per user per month, compared to $125 for Salesforce Professional Edition”.

Entry price for Salesforce is cheaper but if you want more functionality you obviously have to pay more. Microsoft CRM gives you access to the complete system from the moment you first purchase. Your decision should never be based solely on price as its only one component in the decision making process. There is evidence to suggest that a price decision first time around is soon backed up by support requests within 2 years. Decision makers who purchase solely on price first time will place greater emphasis on service and support for subsequent purchases . To compare in-house versus hosted pricing you need to calculate over a 3-5 year period and not just 1 year.

Ownership of Data

Salesforce, as a software-as-a-service provider, does not own the data collected by its customers. Rather, its data centres are outsourced to Equinix, a third party company in the USA and Singapore. With Microsoft CRM software for in-house, and partner hosted options, customers have full control over the security and actual location of their data. You can swap and take your data between these options. Microsoft CRM Online hosted by Microsoft will be released in Australia late 2010 and the data will be hosted in Singapore. You will have the ability to move from hosted to in-house but the online model will have some restrictions around customisation code. Salesforce customersneed to buy the unlimited version if they want development platform capabilities.

Ease of Use
Microsoft Dynamics CRM is designed for easy user adoption because of its similarity and compatibility with Microsoft Office and Outlook. Simply put, it is designed to minimize the need for training, reduce application switching, and produce high productivity. With the launch of Microsoft CRM 5 or 2011 (its release name), Office 2010 and SharePoint 2010, the GUI (interface) between the three products becomes very similar in look and feel. There is likely to be a high chance of uptake because users will find it easy to learn .

Salesforce graphical interface is modern and should be easy to use for most users. The integration to Microsoft Outlook and Office is reported as not as strong as Dynamics CRM especially for MS Excel and Outlook. Those using Google Mail will find Salesforce to their liking .

Both Salesforce and Dynamics CRM have similar modules including sales force automation, customer service and support, marketing automation, document management, contract management, product catalogue management and reports. Although each module for each product has its strengths and weaknesses side by side you must look at each application module against your business requirements (rather than user likeability).

Often organisations short list three CRM applications to be presented to its users. Evaluation should not be based heavily (if at all) on the users liking the look and feel of the graphical interface. The users of an organisation tend to agree on one CRM application as by nature people feel more comfortable with what they already know. If you ask a salesperson who has been using a paper diary for 30 years, what is better – a paper based or CRM system? The response is always paper! The problem you will deal with is that if three different systems are put in front of users at different organisations there is never a clear winner for the CRM application chosen.

At present, Salesforce has many easy to use business add-on products for its base offerings built on its force.com platform. Microsoft has a host of ISV Partners who have built add-on products to Microsoft CRM. However it’s not as easy to find these add-on’s spread out across the globe on various websites. Microsoft has just launched PinPoint that allows you to search worldwide for partner software solutions. Also, Microsoft CRM Dynamics Online does not provide the same access to write custom code in a sandbox. This is because Microsoft did not want external code in its own application. However, with Microsoft Azure, ISVs can execute their own code.

Access to Email & CRM
Microsoft CRM is available through a web browser, through a mobile device or through a Microsoft Outlook plug-in. Salesforce integrates with Microsoft Outlook, Lotus Notes, or Google App’s. Salesforce runs on a mobile device, through a web browser and if you want some level of Email (Outlook, Lotus Notes, or Google App’s) integration. However you will still need to download and install a Salesforce connector.

Scope and Support
Wikipedia reports that Salesforce offers support for 16 languages, while Microsoft Dynamics CRM 25. Microsoft Dynamics CRM’s ecosystem includes 750,000 solutions partners; 2,200 users groups, and 400 community web sites worldwide. Standard support in Salesforce’s subscription fee gives up to a 2 business day response time. With Microsoft, the licensing module you purchase determines the support level and the support offered by a Microsoft CRM Partner. You can choose from ad-hoc through to dedicated support.

The Future and Investments
The Inquirer, an online publication has reported that Microsoft will spend US$9.5 billion dollars in 2010 on research and development making it the largest R&D technology spender in the world.

In 2008, Salesforce spent $63.8 million, or 8% of its revenue, on R&D, much of which went towards expanding the Salesforce’s cloud computing abilities. In addition, 91% of salesforce’s revenue comes from subscription and support fees from their cloud computing services.

The CEO of Zoho, Sridhar Vembu first made this good point in April 2008 by noting the disparities in R&D and sales & marketing spending by Salesforce. Using the financial data from the last 12 months, Salesforce’s sales and marketing spending of $605 million was almost 5 times its R&D spending of $131 million. Businessinsider.com reported that Google R&D spending of $2.8 billion was almost 1.5 times that of its S&M expense of $2 billion.

There is no doubt Salesforce is an established leader in the SaaS market. The question will be whether the heavy weights including Microsoft (with Azure and BPOS) and Google with its GoogleApps will be able to stay in the game and gain market share in the cloud.

SaaS versus In-House
A note on SaaS versus In-House deployment . “In 2009, within enterprise applications, SaaS represented 3.4 per cent of total enterprise spending, slightly up from 2008 at 2.8 per cent,” said David Cearley, vice president of Gartner. This market will reach $8.8 billion in 2010, according to the company’s forecasts.

From a market perspective, most of the spending for SaaS is occurring in the content, collaboration communication, and customer relationship management markets. Collectively, they represented 65 per cent of the global enterprise applications software market in 2009. Many of the bad practices that occurred in the in-house world are now moving their way into SaaS.

The biggest example is shelfware. “Shelfware-as-a-service is the concept of paying for a software subscription that is not being accessed by an end user,” said Cearley. “This most commonly occurs in large organizations, but it could happen to any company, especially those that have downsized their workforce, or one that has oversubscribed to trigger a volume discount.” “SaaS may not have delivered on its early grand promises — of the current SaaS deployments we estimate that a total of 90 per cent of SaaS deployments are not pay-per use — but it has reenergised the software market and added choice,” Cearley said.

First Steps in Choosing Your CRM Solution
Your first step in determining which solution is right for your business is to document your CRM requirements. Secondly, research to see what CRM applications are going to meet your requirements. Thirdly, bring in a CRM consultancy firm and/or CRM Vendor to discuss your requirements and demonstrate their knowledge and application to you. Whether you choose to go hosted or in-house should always come after you’ve gone through the above steps.

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Associated articles of CRM software :

CRM System
Free CRM software
CRM Software
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