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The good news: Microsoft Dynamics CRM Online will finally be available to customers without a US or Canadian postcode. The less good news: it still won't be until around this time next year and there's been no announcement on which countries will get it in which order. The slightly confusing news: there are still some unanswered questions and seeming contradictions in Microsoft's stance on the Software as a Service/Software Plus Services argument.

“We've had CRM Online in North America for a little of 18 months now,” said Kirill Tatarinov, Corporate Vice President of Microsoft Business Solutions at the Microsoft Convergence event in London this week. “It was very important to us to get that right and to fine tune the system and the model before full release. Now we believe that we are ready to do that. We are completely prepared for a worldwide release by the end of calendar 2010. Within the next 6 months, we'll tell you which countries will come first and which data centres we'll be using.”

Leaving aside the implication from that that Microsoft has effectively used the US market as a giant beta programme, what has the firm learned for global release that it didn't know 18 months ago? “When people interact with online systems there are many different aspects that they expect, such as credit card processing,” explained Tatarinov. “We needed to make sure that what we have is truly consumerised and has tremendous ease of use. Most importantly it was about looking at the broad range of go-to-market solutions and making sure that we have the correct model for our own field operations people and our partners, both those who host online or those who sell on premises.”

Windows of opportunity

OK, so now that's all in place, global roll out can commence. But “end of calendar 2010” is a pretty big window (no pun intended) that also puts the likes of NetSuite and Salesforce.com on a 12 month notice period to ramp up their marketing as well as putting the general release of CRM Online into the market at around the same time that SAP unleashes its own Business ByDesign ERP SaaS suite. Is Microsoft trying to give itself a particularly steep uphill battle to fight?

Not at all, says Tatarinov. “We think that there's a pretty big opportunity out there through the power of choice,” he argued. “There are some significant TCO choices to be made. We have a number of customers who have switched to CRM Online from Salesforce.com or to a hosted CRM solution if they have been outside the US. It's an interesting phenomenon. You have people who have been paying expensive subscriptions for their solutions, then at year two they have this point of truth where they realise that they could have paid to own the software by now just through the money they spent on subscriptions. Or they could have paid a less expensive subscription to us and have better integration with Outlook.”

Microsoft will not be taking on NetSuite or SAP head on in the SaaS ERP space. Tatatinov says the firm is not chasing the “one trick pony” approach of pureplay Cloud vendors. “ERP is different from CRM,” he said. “There's more need for customisation. We have deliberately chosen a partner-led model for our ERP suite. So customers can have the best of two worlds and the benefits of partner-led customisation. We are very committed to that model. Partner-hosted ERP reamins the number one priority for us. We do continue to analyse the requirements of the market, but it's most important that we are focused on enabling our partners. We've seen many examples in the US where NetSuite is predominantly playing, when our partners have been very effective at competing with them.”

Mixed messaging or best of both worlds?

Essentially what this seems to be bordering on is the debate between private and public Clouds. Microsoft appears to regard the full blown pureplay SaaS option as a public Cloud approach, but is betting that customers will prefer the private Cloud approach of having applications hosted remotely in a partner's data centre. “We see monetisation coming out the private Cloud,” was one explanation offered by a Microsoft product exec. “We see broad adoption of that approach.”

But isn't that a bit of a mixed message to take to market? You can have a pureplay SaaS CRM offering, but you'll need to tie it into a on premises ERP offering or an on premises ERP offering hosted by a third party? You can't have a pureplay Cloud ERP offering and a pureplay Cloud CRM offering - and in any case you're probably going to realise that the Cloud version's more expensive after a couple of years anyway.

That's clearly not the interpretation that Brad Wilson, General Manager of CRM for Microsoft Business Solutions, puts on it – and he's the guy who has to manage the global roll out of CRM Online. “I think there are two sorts of buyers for SaaS,” he reasoned “You have strategic buyers and you have tactical buyers. The strategic buyers are the ones who look at this stuff and say 'this is not what we do for business, I don't want to be running this stuff'. The tactical buyers are the ones who might say 'I could go either way with this; I might keep it in-house or I might put it in the Cloud, depending on my current budget and bandwidth'"

Your decision needs to be based on a true comparison of costs, he suggests. “At some point, the cost of hardware vanishes. If you're running remotely competitive IT, then your costs to run this in-house over five years might be lower than running it on demand," he said. "When you compare the costs, you need to think about that. It's the buying a car v leasing a car argument. Or buying a house or renting a house. Being a home owner may not be fun all the time, but over the long term it might work out better.”

“Online can apply to everyone: small, medium and large,” he added. “CRM Online won't be the majority of our business in two years time, but it wil be a very important vehicle for us. It will also be the easiest taste test for many customers. You can have an instant trial. For many businesses, the online offering will be first place you will go to test out our CRM. But we won't twist your arm one way or the other.”