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Microsoft Dynamics CRM Software Review
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Privacy Policy Microsoft Dynamics CRM Software Review

Price and Service Offerings

Microsoft Dynamics CRM comes in three deployment options and multiple editions or offerings for each of those.

On Premise

This is a traditional perpetual software license that requires you to buy the product from Microsoft directly, through a retail outlet or from a Microsoft Certified Partner. This also means that you must provide and maintain the hardware that runs the system. Because of this, you should factor in the cost to setup the infrastructure and maintain it, as well as the administration of the CRM product itself. Pricing varies based on the edition you buy, number of users you license, what is bundled with your purchase and who you buy it from. It also requires licensing of the Microsoft Small Business Server 2003, which has its own costs and constraints on how it is deployed and configured.

Like many other Microsoft products, Dynamics CRM 4.0 comes in three editions:

Edition Features Targeted At
Workgroup Edition Maximum of 5 users. Can only be deployed on a single server for a single organization. Small business
Professional Edition Unlimited users. Can only be deployed for a single organization. Middle Market
Enterprise Edition Unlimited users. Can be deployed to multi organizations or a single organization on one or multiple servers. Enterprise

The benefits of all of these on premise options is that you have the ability to integrate the solution with applications behind your corporate firewall and link in your own custom applications or pages that would not otherwise be possible through a hosted delivery of the same applications. There are also benefits of integrating with your own Exchange server and leveraging Microsoft development tools such as Visual Studio and .NET framework to develop your own complimentary applications leveraging information contained in the CRM application. Of course, this does require you to make changes to Exchange and Active Directory Environments, which may cause concern for some CIOs who have wrestled with unwinding such changes in the past. The drawbacks of an on premise model are the up front costs for the licensing, one-time infrastructure investments, and ongoing maintenance costs that are part of any on premise solution.

Dynamics CRM Live

Dynamics CRM 4.0 can be leased as a service directly from Microsoft in North America and from Microsoft hosting partners internationally. The CRM Live offering from Microsoft allows the company to compete directly in the Software as a Service (SaaS) space with the likes of Salesforce.COM, RightNow, Aplicor, Netsuite, Entellium, and others. This product offers the same features and functions as the on premise solution with the exception of integration and hosting of custom web pages. The hosted or SaaS model allows you to lease user licenses on a per seat basis each month without any infrastructure costs.

Dynamics CRM 4.0 Live comes in two editions as well:

Edition Features Price * Targeted At
Professional Full CRM functionality. 100 workflows and customizations. Outlook integration. $39/user/month Small business
Professional Plus All features above, plus: added storage (20GB versus 5GB for Professional), Offline Synchronization, 100 additional customizations and workflow rules. $59/user/month Middle Market

(*) Prices are published on Microsoft’s website as of the writing of this paper and subject to change.

The primary difference between the two Live editions is that the Plus edition offers Offline Synchronization. This means that it installs a local copy of SQL Server 2005 on your laptop or PC and downloads a subset of the data that is available to you in the online system to your local machine. This allows you to work with CRM in an offline mode and synchronize once a connection is reestablished. This is a common feature of some of the better SaaS CRM solutions available and may be relevant if you have a remote workforce with limited connectivity.

The primary benefit of the hosted or SaaS option is that it allows you to setup and use the application with no infrastructure costs. This can often accelerate the time to setup and implement a solution of this kind and can also allow you to deploy it in a phased approach without any regard to how to deploy it physically. As long as there is a high speed internet connection available and an IE browser on your machine, you can access CRM Live from anywhere, just as you can with any SaaS based solution. This option can also be used to try out a pilot of the system to validate requirements and design assumptions before you commit to spending money for a full on premise implementation.

One thing to watch out for with the CRM Live option is that Microsoft, albeit a giant in the software industry, is a relative newcomer to the SaaS space. For example, they’ve committed to spending over 1 billion dollars on data centers and infrastructure specifically for this product line. While they have the resources to deploy software in this way, they may not have the requisite experience to deliver and manage it the same way many other SaaS providers have done and refined over the last several years. While Microsoft is always great at figuring things out over time, providing access to a mission critical CRM application is not the same as having an issue with a Sharepoint site. As Salesforce.com has taught many SaaS customers, being associated with a giant in the industry doesn’t necessarily guarantee performance and reliability.

Partner Hosted

There is also a Partner Hosted option for Dynamics CRM 4.0 from one of the many Microsoft hosting partners. These partners are value added resellers of Microsoft products and often bundle the hosted service with their own implementation services, flexible hosting options and third party add in products that can both increase the value you get from the solution and the cost that you pay for that solution. While this service can sound and look like the CRM Live product offered directly from Microsoft, it can come with both benefits and risks. The number of options and prices are too numerous to include here and you’ll have to use Microsoft’s own Pinpoint services to find the hosting partner that is right for you.

The benefits of this option is that you can work with a local provider that can provide both industry and product knowledge along with any necessary setup and configuration services. You can also negotiate to have other services, options and service level agreements (SLA) metrics included as part of your contract that may not be available from Microsoft directly.

The risks with using a hosting partner all stem from the degree of variability and quality from one partner to another. Even with a certification process from Microsoft, there is no guarantee of performance or uptime with a hosted solution. There can also be wide variations in pricing and contract terms especially on country by country basis. There can also be a fair amount of finger pointing when you’re dealing with another party and relying on them to get you support and information from Microsoft when something stops working. If you decide that a hosted model is for you, you should consider your need for assistance and the options that are important to you in an agreement before deciding on getting the service directly from Microsoft or a hosting partner. Both can be good choices and both have benefits and risks associated with them.

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