Microsoft CRM fees 'undercut by canny resellers'

Microsoft's ongoing attempts to establish itself in the customer relationship management (CRM) market are facing a new challenge: canny resellers using other Microsoft technologies to reduce the licence fees which customers pay.

Meredith Thompson, managing director of business software advisory service Software Choice, said many of the businesses she consulted with were reluctant to explore Microsoft's CRM offering because of the named-user pricing model, which resulted in potentially having to pay full price for staff who only rarely had to access the system.

She said: "You want the whole organisation to use it but that's expensive."

Some resellers have circumvented that problem by using Microsoft's SharePoint intranet technology, enabling limited access to the CRM application, Thompson said.

While Microsoft admits it's possible to utilise SharePoint in that way, officials argue it isn't necessarily the most efficient approach.

Ross Dembecki, lead product manager for Microsoft CRM in Australia, said: "With MS Dynamics CRM 3.0, we've actually gone to rather simplified licensing and pricing structures."

According to Dembecki, earlier releases had separate licences for servers and users, with additional fees depending on what components were installed: "The price point for the product is now less than for the old suite."

However, the named-user requirement largely remains, Dembecki said: "If you are a user of CRM, you need a CRM client access licence. The only exception is if you use an External Connector Licence" - which is primarily designed for giving outside contractors system access and is paid on a per-server basis.

Paying for that would not necessarily be cheaper than paying per-user fees for many organisations, Dembecki said.

While customers could also use SharePoint to access some of the back-end databases used by the Microsoft CRM application, such systems could not readily be used to upload new data, he added: "That access is purely read-only."

In late March, Microsoft announced plans to merge its CRM product with other enterprise software carrying the Dynamics brand, including ERP systems, though no firm timeline has been established.

Angus Kidman writes for ZDNet Australia