With the launch of the cloud-based software the company is aiming to give market leaders a run for their money
Dynamics CRM Online, the cloud version of Microsoft’s Dynamics CRM 2011, is set to change the Indian Customer Relationship Management (CRM) market.
Launched about a month ago, the product has already caught Indian enterprises by storm. The growing purchasing power of an estimated 200-300 million middle-class Indians is only adding to the craze.
In the past one month, the software has seen over 20,000 global customers come for trial, while in India, about 900 enterprises are trying out CRM Online.
CRM Online is a software that allows large, and small and medium enterprises (SMEs) keep track of customers and their buying trends. The CRM market is dominated by players like Salesforce.com and Oracle.
“What differentiates Dynamic CRM from the rest of the market is its usability. Dynamic CRM is built inside Microsoft’s Office Outlook, which is the most popular email platform. Customers who already use Outlook have an easy way to access information about their clients, pipelines, opportunities and leads from the same environment. They don’t have to leave their familiar interface; they can do everything on Outlook and that’s a very important and significant differentiator,” says Kirill Tatarinov, corporate vice-president of Microsoft Business Solutions (MBS).
The on-premises CRM Solution from Microsoft is an important step to further entrench its position in the Indian market. Currently, Salesforce is the leading player in this space in India followed by Siebel CRM On Demand from Oracle. With the launch of Microsoft Dynamics CRM Online, the software giant has posed a big challenge to these two companies, say market analysts.
A Zinnov study says on-demand CRM is gaining ground in India and being in the early stages of adoption, the vendors offering on-premise CRM solutions have an early mover advantage — including Microsoft, SAP and Oracle.
“The cloud services especially for CRM is expected to grow at a very fast pace simply because the user adoption for CRM will also proportionally see a rapid increase. In India, the highest growth for enterprise applications will be in the CRM space. So the SME segment will be the fastest growing for cloud services and while bigger enterprises are taking a wait-and-watch approach, they will adopt CRM by combining on-premise and cloud services,” says Sunil Padmanabh, research director of analyst firm Garner.
According to Gartner, the CRM market in India (including the on premise and cloud-based offerings), currently stands at about $111 million (around Rs 500 crore) and expected to touch $179 million (around Rs 800 crore) in 2014 at a compounded annual growth rate of 17.4 per cent. The On-Demand CRM market in India is currently at a very nascent stage with a total market size of $16-18 million (Rs 72 crore -Rs 80 crore), says a Zinnov study.
What is also making Microsoft find early adopters in India is the increased usage of Microsoft enterprise products. Take the case of Pebs Pennar, a subsidiary of Hyderabad-based manufacturing solutions provider Pennar Industries. Incorporated in January 2010, the company grew to a size of Rs 170 crore in revenue this year from just Rs 30 crore last year. In order to facilitate the growth the company wanted to deploy cloud-based software solutions to manage issues like customer feedback, order management, procurement and project management. The company has a distributed sales network spread across 12 different cities in India.
“We were evaluating other players as well. But after careful comparison, we realised that we are an organisation that makes heavy use of Microsoft Outlook and other Microsoft products. Given that we have a distributed sales network, we felt it is important to deploy something which can integrate very well with Office and Outlook,” said Aditya Rao, director of Pebs Pennar.
Today, Pebs Pennar is in the advanced stages of phase one of deployment of Microsoft Dynamics CRM online. “We have already covered sales and customer relations and order management parts. Our next phase will take us to cover project management, which will involve much more holistic implementation,” adds Rao.
“Particularly for Microsoft’s product the advantage will be whatever is available on premise, will be available on demand on the cloud. So they are also bringing in native Outlook experience, which will only improve the usability of the CRM system,” says Padmanabh.
But despite the ease, Microsoft will have to be very focused. “Microsoft does not have the mindshare of the clients as much as Saleforce.com. So to that extent, people who are familiar with Microsoft platforms and Microsoft applications, will embrace this. But Salesforce.com – because they are the world leader and have a very aggressive pricing strategy – will provide an extremely tough competition to CRM Online. It’s just a matter of time for the price war to start,” adds Padmanabh.
