Microsoft's CRM plans set back

Microsoft has shelved plans to release a 2.0 version of its customer relationship management software in March, saying it needs until the end of the year to finish the program.

The delay, which the company discussed on Thursday, comes as Microsoft hires a new executive to lead its customer relationship management division. Former PeopleSoft executive Brad Wilson joined the company on Monday as general manager of Microsoft CRM. Dave Batt, former senior director of Microsoft CRM, left the company last month. He would have reported to Wilson.

In an interview, Wilson insisted that the sudden decision to put off the 2.0 release was unrelated to the recent management changes.

"I wish I could claim to be that important," Wilson said. "I'll make big things happen soon; this isn't one of them."

Instead, the company wants to spend more time developing the product after reviewing feedback from partners and customers, he said. Microsoft will concentrate on making the software easier to install, he said. It also plans to add more "workflow" and software integration features.

Microsoft first introduced the CRM product about two years ago after launching a new business unit dedicated to developing business management applications. In that market, Microsoft competes with dozens of companies, including Oracle, PeopleSoft, SAP, Siebel and Salesforce.com.

Microsoft is trying to carve out a niche for itself in the market by targeting businesses with fewer than 500 employees. It's signed up more than 3,000 such customers for the product so far.

Still, Microsoft's foray into the business applications market has not been easy. During its most recent fiscal quarter, Microsoft reported that revenue was flat in its Business Solutions division, of which the CRM unit is part. The division continues to lose money too, although losses have narrowed. Last year, the company reorganised the division's leadership and elevated the head of the group in the chain of command in an effort to get business on track.

Microsoft has dropped several hints that it's interested in signing up bigger customers. Last year, the company let it drop that it had approached SAP about a merger. SAP caters to very large, global companies. More recently, Microsoft has offered discounts to lure former PeopleSoft customers to the fold after its acquisition by Oracle.

But according to Wilson, the CRM group remains focused on its initial mission, at least for now. "Our goal is to serve small and medium businesses and divisions of large companies," he said. "But over time, we'll definitely grow our business in a lot of directions."

Alorie Gilbert writes for CNET News.com.