Microsoft Convergence

Posted: March 19, 2008 in CRM

Microsoft Convergence is a very large show. Last week in Orlando, there were in excess of 9,500 people most from outside of the United States and by that measure alone it was a successful event.  Convergence is one of Microsoft’s chances to meet face to face with its partners and customers for the usual mix of training, new product announcements and the like and I went hoping to learn more about the company’s continuing effort to field a relevant CRM solution.

What I found was a mixed bag.  First off, Convergence is an ERP show.  There’s nothing wrong with that but Microsoft has, I believe, four ERP systems and CRM is a latecomer to the mix.  Also, a show like this has equal parts devoted to the products, partners, customers, prospects and press and analysts and all of the parts are moving so it’s somewhat difficult to tease out the CRM part. 

What I got from the CRM part was this: Microsoft has a very serviceable CRM 1.0 product.  By that I mean all the parts for conventional CRM such as SFA, marketing, and service are there and the partners and end users are making use of them in creative ways to derive value.  However, in a world that is increasingly talking about CRM 2.0, social media, social networking and communities, Microsoft still has some distance to travel.  I did get to see some community applications and was told that version 5.0 would have more emphasis on CRM 2.0, but that’s still in the future.

Microsoft’s messaging was another matter.  I can’t quite describe it but seems like they are trying to sell CRM as if it is another part of ERP.  ERP is inherently inward looking and its purview is a limited set of well defined business processes.  On the other hand, CRM is inherently outward looking, its processes are mediated by the vendor and participated in by balky customers and that difference can be substantial.  At a time when most CRM vendors — Salesforce, SAP, Oracle Sage and others — are making visionary statements about engaging the customer in new and different ways, Microsoft’s CRM messaging was filtered through a green eyeshade.  For me it didn’t work.

While we’re on the subject of messaging, it was surprising to me that there was no third party speaker offering any visionary statements that backed up the company’s primary messages and speakers.  The only visionary speeches were the keynotes delivered by Microsoft executives, most notably Steve Balmer.  Microsoft is not the only vendor to avoid bringing in visionary speakers but I can tell you it makes a difference.  Sage, on the other hand, routinely brings in people like Martha Rogers and Joe Pine to talk about the future of business, not computing per se.  These speakers get partners thinking about how their businesses need to continue changing and in my opinion it’s worth the effort.

After a few years in which the company did not have a great deal to show for CRM, they have gone to the other end of the spectrum and can now inundate you with features and functions.  Sometimes that leaves an impression that Microsoft CRM is more of a tool kit than a set of solutions.  While I don’t think that’s quite accurate, lots of partners make a living customizing Microsoft solutions so the tool kit impression might have been good for partners but not so good for me.

The company also focused on a couple of things that I don’t think of as important — the centrality of Outlook and the ability of its CRM product to operate behind the firewall in conventional mode or across the Internet in an on-demand mode.

Outlook is wonderful and I use it, but I am not certain that it makes sense to build the CRM user interface around it.  After all this time, there should be other, better, metaphors to focus on, if not, the designers in Redmond ought to come up with something — customer microsites for example.  It makes no sense to me that the company that completely re-invents the PC operating system every four years can’t come up with a better metaphor for a CRM work environment than email.  (Then again there’s Vista.)

As for the on-demand/on-premises debate, I can understand the attractiveness — even seductiveness — of having both options and Microsoft has done a good job of building one code set that supports both modes.  I can also understand that there are still outposts of the computing world that are not ready to cut the tie with conventional and expensive on-premises computing and for them the Microsoft solution is brilliant.  Nonetheless, I don’t think messaging that positions the future of computing as a choice between two completely equal options is valid.  The options are not equal, on-demand is the emerging metaphor.

What I have more trouble understanding is the way Microsoft enables its partners to host on-demand CRM.  I was told that Microsoft has no hard rules in place that stipulate things like service levels that the partners must provide.  In effect, every partner gets to make its own service level plan and a Microsoft executive told me the company expects that simple competition will drive higher standards. 

As a practical matter, that means one vendor might offer a SaaS 70 Type II data center with mirroring, and another might not.  It seems like a big risk for the customer to first understand the differences and then to shop for the better alternative.  It is an even bigger risk for Microsoft to be making its software available in such an unstructured environment and to place its reputation in the hands of a Balkanized group of partners with differing SLA standards.

I have to say I just don’t get it.

Microsoft Convergence had a good deal going for it.  The show was well attended, the show floor was packed with partners and customers looking for solutions and there were many good sessions.  The show highlighted the company’s jewel in the crown which is its partner program.  If there’s one thing that Microsoft gets it is how to operate a partner program. 

There are numerous partner programs in the CRM space right now and, no surprise, some are better than others.  The biggest unanticipated consequence of Convergence might be the effect it will have on other partner programs.  With credible CRM to complement its multiple ERP solutions Microsoft may at last be in a position to compete more effectively with CRM vendors that do not offer as many amenities for their partners.  If that is true, look for other companies to beef up their partner programs in a hurry.

Comments
  1. Munjal Dave says:

    Dennis,

    Love your blog. Thanks for your generosity in sharing your thoughts and experiences.

    Regarding MS CRM and CRM 2.0, a question popped in my head – are we getting caught up in hype surrounding Web 2.0 and CRM 2.0 in general? Aren’t customers still very much focussed on leveraging their investment in CRM 1.0 and are gradually evolving to CRM 2.0? Also, most customer are probably not looking for a suite for CRM 2.0 yet. Yes, Collaboration and Web 2.0 is very important but so is improving internal processes, and both of these are not mutually exclusive. Isn’t MS just not indulging in vaporware that many of their competitors are engaging in? In words of Jim Collins, MS seems to be taking the hedgehog approach (focus on few things – like usability in CRM) vs fox approach (trying many things and seeing what works). In other words, MS seems to be addressing the mature market and laggards, not the early adopters. While that’s not trendy but it still seems a viable strategy to me.

    Regarding partners – i think SAP, MS and Oracle do very similar things but probably do them differently. It is interesting to see different approach to product development – MS seems to be focussing on partners to drive many aspects of innovation such as addressing white spaces. SAP seems to be more focussed on filling up white spaces in-house, as AMR’s Bruce Richardson seems to suggest in his note this week. Oracle, as we know, is filling white spaces via M&A.

    Key question to me is this – how are customers reacting to these messages?

  2. I attended the show as well, and got exactly the same vibe as you did, Denis. It was really hard to get CRM users and partners to discuss anything beyond efficiency gains in the sales force. Maybe it’s because the audience was mostly IT people, but they aren’t thinking strategically about the possibilities of the systems, and they certainly aren’t ready to connect to customers in the Web 2.o realm yet.

    To me it just shows how IT and the rest of the organization really need to break down barriers and work holistically on efficiency gains as well as customer relationship improvements.

  3. Thanks for all the comments. Despite its size, Microsoft is still a work in progress for CRM. The company has one of the best partner programs in the business and I expect that will enable them to take a significant position in the market despite being terribly late to the game.

    Microsoft appears to be in conflict with itself. On one hand it has engaged with EDS to bring its brand of CRM to the enterprise and on the other it has engaged heavily in the SMB end of the market. The conflict is that MSFT has a CRM 1.0 product that might be very suitable for the lower end of the market but what they’re selling to the enterprise is the near future.

    One reader suggests that MSFT is not engaging in vaporware discussions which is laudable, but only for MSFT. The vaporware in question is not vapoprware for many of MSFT’s competitors. My point is that MSFT was late to the game and the company is still playing catch-up. They might be able to deliver CRM 1.0 solutions to late adopters but so what? There is no news there.

    I am all about what’s new and what will be a game changing product/service/strategy. So good luck to Microsoft and god’s speed, I hope they get to CRM 2.0 soon because that’s where the action is today. I can’t imagine a Global 2000 company wanting to engage with Microsoft or anyone else to get a CRM 1.0 solution; those companies already have 1.0 solutions, they’re looking to change the game. You can’t blame them.

So, what did you think?

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