Microsoft to go Live with on-demand CRM

Microsoft plans to launch a new hosted CRM service next year under its expanding Live brand.

Microsoft Dynamics CRM Live, an on-demand alternative to its on-premise CRM software, is set to debut by mid-2007 as part of a revamped product code-named Titan.

Steve Ballmer, Microsoft's chief executive, announced the offering in Boston on Tuesday at a conference of roughly 8,000 of Redmond's business partners.

Ballmer made his pitch to the partners on why they should work with Microsoft. "When you leave you have to understand what the opportunity is for you, and do you want to invest with Microsoft," he said.

The revamped customer relationship management hosting plan was widely expected. Ballmer called CRM Live "maybe the single most inevitable announcement in the history of Microsoft".

The service, the third major category under the Live brand, joining Windows Live and Office Live, underscores Microsoft's ambitions in the business software market. Company executives have said it could represent Microsoft's next billion-dollar business.

Microsoft, Ballmer said, will "move with Live implementations to create a platform out in the cloud that is hostable; is extremely, extremely important".

The hosted CRM service is based on the same code base as the company's traditional on-premise software that customers install within their companies. Microsoft will host the new service within its own data centres, said Brad Wilson, general manager of Microsoft Dynamics CRM.

Microsoft's main rivals in the CRM business include Oracle, which purchased Siebel Systems last year; Salesforce.com, which is seen as the leader in the hosted CRM market; and SAP, which launched its own revamped hosted CRM service earlier this year.

Wilson said the move isn't in reaction to SAP or other competitors: "Our competition is very broad. This announcement is not in response to any particular competitor. It's more of a reaction to an opportunity in market.

"Our business is growing so fast that some of our partners are working larger deals. We need an easy on-ramp for customers and easier way for partners to get up and running with CRM."

Microsoft did not disclose pricing for the new service. Wilson said: "We will price competitively with what is in the market."

At the Boston event, Ballmer also discussed Microsoft's priorities for the coming year.

He said: "As a company we're entering into a set of new markets - business intelligence, portals and collaboration market; search, from the desktop to the enterprise to the internet; unified communications, including voice over IP, mobile and other phone devices."

On the security front, Microsoft is shifting from improving existing products to entering the security market "in full force", Ballmer said.

Mike Ricciuti writes for CNET News.com