Dynamics CRM Online is priced as a per user per month subscription. The subscription fee includes the CRM suite of sales, marketing and customer service. Unlike most competitors, Microsoft bills monthly in arrears.
Beginning with the Dynamics CRM 2013 release, the company altered the pricing model in order to simplify pricing and bring parity between the online and on-premise versions. Dynamics CRM Online pricing uses a tiered approach which assigns price commensurate with software scope. The three pricing levels include:
- Professional at $65 per user per month and includes sales force automation, marketing and customer service. This is the traditional CRM suite and will be the most popular choice for most customers.
- Basic at $30 per user per month and will include more limited sales, marketing and service for users who need to manage leads, accounts, contacts, cases and access custom applications or reporting.
- Essential at $15 per user per month is intended for users who need to access to custom applications developed in house or by ISVs.
There is a minimum threshold of 5 Professional user licenses for new online customers.
This cloud CRM pricing model delivers new flexibility that will unquestionably reduce total cost of ownership (TCO). By permitting customers to mix and match subscription licenses based on each users' utilization, and not mandate that the CRM subscription fee for all users is equal to the fee for the most expensive user, subscription costs will clearly be more cost effective.
On-premise CRM pricing will follow three comparable tiers. At the time of this CRM review, the Professional version is priced at $984 per user and $787 per device, the Basic version is $342 per user and $236 per device and the Essential version is $79 per user or device. The Microsoft Dynamics CRM Server is $3938 per instance. The on premise CRM solution is a traditional software license procurement where all payment is due up front. Specific pricing may vary. Microsoft provides financing options upon request.
While subscription pricing is a strong advantage for Dynamics CRM Online, caution should be exercised for organizations wanting to begin with the cloud solution – possibly to achieve early validation or complete a proof of concept – however later switch to an on-premise installation as Microsoft does not normally provide a credit for prior SaaS payments to be applied to the on-premise redeployment. Customers migrating from SaaS to on premise will be required to purchase the traditional on-site software licensing at the time of conversion.
Microsoft manages what is arguably the best enterprise software partner channel in the world. On premise CRM software is delivered in largest part by Value Added Resellers (VARs). While VARs are authorized to sell and support either the on premise or cloud versions, as noted earlier, many VARs exhibit clear favoritism toward the on premise product due to significant differences in financial remuneration.
The Dynamics CRM online product can be delivered and hosted by either Microsoft directly or a business partner. While some larger companies prefer to have a direct relationship with their publisher, small and midsize businesses may achieve superior services delivery and more personalized support from local partners and face to face relationships. The Dynamics partner channel is global, deep and mature. There are over 4000 Dynamics CRM partners worldwide. The Microsoft Dynamics community is now over 50,000 members and continues to grow.
Global or multi-national companies often seek out very large integrators for implementation services and support. While many of these global integrators were somewhat reluctant to initially get on board with cloud CRM solutions, due to the smaller project sizes, many have complimented their business models with new specialties for cloud solutions and gained strong expertise with Dynamics CRM. Unlike the broad and diverse VAR channel made up of thousands of companies, the number of global service providers with Dynamics expertise is relatively small and includes companies such as Accenture, Avanade, Cap Gemini, Ciber, Deloitte, HCL, HP Enterprise Services, Fujitsu, Hitachi, IBM, Infosys, Logica and Wipro. While the global system integrator list looks good, the reality is that most of these integrators have very small Dynamics practices which are often a fraction of the size of their Oracle, Salesforce and SAP CRM practices.
With the proliferation of cloud solutions, several integrators are looking beyond a single cloud application and developing cloud sourcing services and firmware to rationalize multiple vendor solutions into a single customer environment. Some solutions resemble a cloud broker model while others act as a front-end consolidation tool which provides multiple vendor systems management for factors such as provisioning, authentication management, integration, security rights and multi-vendor contract management.
Microsoft is fiscally sound, relatively diversified and competitively strong. The company's longevity is a competitive strength in a CRM industry where several competitive products are from far less stable, emerging growth companies. While its corporate viability is strong, it does face some unique pressures with far reaching implications, including regulatory pressures, new technologies such as open source software, new well funded competitors such as Google and Amazon and innovators such as Salesforce.com which garner early market share leadership before the software giant enters the market.
The initial strategy to morph Dynamics CRM and Outlook was guided by objectives of user simplicity, unified desktop systems and improved staff productivity. While sound objectives, competitors quickly pointed out the practicality which left users navigating through multiple screens and windows, incurring lengthy click streams and sometimes finding themselves at a loss of how to back track or repeat common work processes. Dynamics CRM has remedied much of that confusion by leveling the number of pages for most business processes, merging dynamic data displays to common views, better linking core objects, improving work flow processes and simplifying navigation.
Other CRM competitors have suggested the business software is little more than a side business for the software giant. This dialogue has even been amplified by analyst firms such as The 451 Group which have suggested that "Microsoft would be best served by simply acknowledging that it never made much of Dynamics, and selling off its CRM and ERP assets". In reality, Microsoft's investments in CRM and ERP have been big—over a billion dollars for the Great Plains acquisition, another billion for Navision and several hundreds of millions in continued investment—and while payback has not met early forecasts, momentum continues to build. Microsoft clearly has the wherewithal and tenacity to continue a strategy which it believes will be ultimately fruitful.
Based on visible and vocal executive sponsorship from the top of the company, substantial R&D investments and consistent statements from Microsoft executives I believe that claims which suggest a lack of strategic intent for all the Dynamics solutions are without basis and I have every reason to believe that Microsoft intends to achieve a CRM leadership position.
There is also a myth that Dynamics is limited to or most suitable for small businesses. While the CRM product does often satisfy small and midsize businesses (SMB), it is in no way out of reach to enterprise customers. The product's feature sets, scalability and global support clearly make it competitive in the enterprise market.
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