By Linda Rosencrance
When it comes to Microsoft Dynamics CRM Online's Fall '13 update,
the old adage, "you get what you pay for," seems to be an accurate assessment.
agree that the Microsoft's new CRM Online release offers more functionality for the
price than the CRM solutions of other vendors including its closest competitor,
But even though Dynamics CRM Online 2013 is giving
customers more bang for their bucks, Microsoft probably should have done a
better job telling those customers exactly how many
additional bucks that extra bang was going to cost.
"Should Microsoft just have jumped the price without
a whole lot of preparation? No," said Paul
Greenberg, President of The 56 Group, LLC, a consulting firm focused on
CRM. "Microsoft didn't really do a good job. It would have been in Microsoft's
best interest to start preparing customers over time. Microsoft should not have
just dropped the bomb. They should have informed people months ago that this
was going to happen and babied it a little."
When Microsoft launched
Dynamics CRM Online professional in 2008, it debuted at an introductory
thirty nine dollar per person per month price point for the "professional"
"It was sort of the equivalent of a loss leader and
a come on at the time - when Microsoft was just competing with Salesforce,"
says Greenberg. Although Microsoft claimed CRM Online was the same as
Salesforce, Salesforce was actually more robust."
Then Microsoft raised the price of the CRM Online
license to $44 in January 2009, where it remained until it rolled out Dynamics
CRM Online 2013, when it increased the cost of the professional license to $65.
"The $44 was still an incredible price for the
functionality people were getting and again really aggressive," Greenberg said.
"It was basically an early adopter price. Microsoft would never have said that
because that would indicate it was a new product."
Greenberg said since Bob Stutz, now corporate vice president,
Microsoft Dynamics CRM, arrived at Microsoft from HP in 2012, he has shaken up
the product strategy.
"He completely revamped the product; it's eons ahead
of where it was," he said. "There are still some holes in it, but Dynamics CRM
Online 2013 is substantially a better product than what Microsoft had on the
table before - although it still doesn't improve customer service a great deal.
You're getting more for the money and you're getting a much better and much
more contemporary user interface. You're getting capabilities that businesses
can use effectively and scale."
So for the current price of $65 for the professional
license, customers are, in effect, getting a much better product, Greenberg
"Functionally it's as close as you're going to get
to Enterprise at Salesforce, which costs a hundred and a quarter and you're
still up against Oracle CRM On Demand, which is still ten dollars more," he
said. "Yes, [Dynamics CRM Online] is more money but you don't buy things based
on that price unless you're a small company that has to consider price as a
first priority. You're buying on the basis of what you need."
Esteban Kolsky, Principal & Founder, ThinkJar
LLC, agrees with Greenberg.
"You have to ask
yourself if the new product still does what you need it to do," Kolsky said.
"You also have to look at the new functionality and decide if you need any of
that stuff. And you also have to ask yourself how happy you are with the whole
concept. Do you like the vendor? Do you think they do a good job? Do you like
the product? Is it flexible? Does the new interface work for you? If you're
happy with what you have and if you're going to need the new functionality in
the future, then it's a good deal. If not, then you have to look at the
numbers. But looking at the numbers only without looking at why the numbers
changed is wrong."
Greenberg said if what Microsoft is offering isn't
worth $65 to companies, that means Oracle isn't worth it to those companies and
Salesforce isn't worth it to them, either.
"Saying you'll get another vendor is silly," he
said. "You should get another vendor if the capabilities that Microsoft is
offering are no longer adequate or if you can't afford it. But if you're not a
small business, you're going to have hard time finding anything. I don't think
the price increase is any basis to drop Microsoft. In fact, you should really
take a look at the good things you are getting for it. But at the same time, I
don't think it was to Microsoft's benefit to just throw it at somebody, either.
It doesn't help their visible public image. You just don't do that in the market.
You just don't change it to the point of twenty-one dollars. That was not the
best way to go."
But the real test of whether or not the price
increase is going to be a shock to customers' systems is not to look at it
prospectively but retrospectively, said Denis Pombriant, managing principal, Beagle Research.
"I think you need three to six months and then
revisit the subject and more likely than not, you'll discover that the
marketplace has taken the price increase in stride," he said.