ChannelWeb: 10 Predictions for microsoft in 2008

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9. The release of Dynamics CRM 4.0 will have a bigger-than-expected impact on the SaaS market

With this week's release to manufacturing of Dynamics CRM 4.0 -- the first major update in three years -- Microsoft has put CRM suppliers such as NetSuite, Oracle, Sage, and SAP squarely in its crosshairs.

Ryan Toenies, CRM solutions vice president at Inetium, a Minneapolis-based VAR, expects Dynamics CRM 4.0 to gain significant market share in 2008 because it offers customers the option of on-premise, Microsoft- and partner-hosted deployments.

Some Microsoft partners have raised concerns that the hosted CRM applications, which Microsoft will make directly available to customers for a subscription fee, could compete with channel partners' own offerings. But a growing number of solution providers are eager to host Dynamics CRM 4.0 themselves and offer it to customers as subscription service.

For VARs that can make the necessary infrastructure investment, the partner hosted model holds the greatest potential, according to Toenies. "If you're looking at creating a vertical solution on top of CRM, this will allow you to host and offer services," he said.

People want flexibility in the IT decision making process and CRM 4.0 gives them the power of choice, says Mike Belongie, vice president of sales and marketing at Axonom, Minneapolis.

"I think Microsoft is going to kill Salesforce with the Dynamics CRM 4.0 release. It's now a truly a multi-tenant product, and I've been closing deals with the message that it's O.K. for customers to start out with the hosted version," said Belongie.