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While Europe awaits the arrival of Dynamic CRM Online late next year, Microsoft is upping the ante in the US with a scheme to steal away Salesforce.com and Oracle CRM on Demand customers with the offer of six months' free access if they sign a 12-month contract.

Microsoft currently charges $44 per month per user for CRM Online Professional edition, compared to $65 per month per user for Salesforce.com Professional and upwards of $70 per month for Oracle CRM on Demand. The six-month offer is valid through the end of this year, but may be expanded to other CRM offerings if successful.

The company also delivered a new service update to the online CRM offering. “The new service update to Microsoft Dynamics CRM Online demonstrates our commitment to simplify the customer experience, deliver rapid innovation and offer more value at a lower price,” said Brad Wilson, general manager of Microsoft Dynamics CRM. “Microsoft Dynamics CRM Online enables businesses to begin driving productivity and results in a matter of minutes.”

Microsoft claims the update provides:

• Faster online access, enabling organisations to get started with a trial or paid subscription to Microsoft Dynamics CRM Online in less than five minutes. Customers are able to access the Microsoft Dynamics CRM Online service through a Microsoft Outlook interface, via a Web browser or from a wide range of mobile devices — all at no additional charge.

• Simple contact management with a single, unified view of customer information that helps sales people manage accounts and drive revenue. A new Get Started Pane delivers guidance, training and access to communities, and Microsoft Knowledge Base articles, which the firm argues will allow users of all skill levels to maximise productivity. In addition, Microsoft Dynamics CRM Online makes it easy to import data from other CRM applications.

• Better sales performance, sales forecasting and workflow capabilities that Microsoft claims will ensure that customer engagements happen quickly and consistently. A new home page dashboard provides real-time views into key metrics that help prioritise daily activities.

• Better economics in the form of simpler pricing. All Microsoft Dynamics CRM Online offerings are now available at $44 per user per month, and include offline support, 200 custom entities, 200 workflows and 5 GB of storage.

BPOS price cuts

On a more global scale, Microsoft also announced price cuts for its Business Productivity Online Suite (BPOS) which includes Microsoft Exchange Online, Microsoft SharePoint Online, Microsoft Office Communications Online, and Office Live Meeting, which provide e-mail, contacts, and calendaring, online collaboration, instant messaging, and Web conferencing capabilities. Microsoft also just increased the amount of online storage to 25GB.

Microsoft said that subscriptions will be reduced to just $10 (£6) per user per month, for a minimum five-seat subscription. For Exchange Online alone, its email software-as-a-service, the price drops from $10 to $5. Microsoft also has increased its standard e-mail storage per user from 5Gb to 25Gb, the same amount that Google provides for Google Apps subscriptions.

The price cuts come a week after Microsoft lost a battle to prevent Google persuading the city of Los Angeles [2]to use its online apps for 30,000 e-mail accounts, but Microsoft denied there was any connection between the two events.

"Global organisations, such as Rexel Group and Tyco, are choosing Microsoft Online Services for the rich capabilities, flexibility and value they deliver," said Microsoft business division president Stephen Elop. "In just a year, we have grown to 36 countries and more than a million paying users, and we are not slowing down. We will continue to bring new innovations and deliver the software and services businesses need to succeed."

One big name that has move to BPOS is hamburger giant McDonald's. “Within McDonald’s, collaboration and communication tools are critical to our success and ongoing innovation, and with Microsoft Online Services, we found a cost-effective yet familiar, intuitive solution that we could trust with our business communications,” said Chris Millington, global chief technology officer and senior vice president of Shared Services at McDonald’s. “We have already completed over half of the corporate rollout and, by early in the next year, we will be fully deployed throughout our organisation. We expect to reduce our IT costs and increase our productivity.”

BPOS has also been rolled out to new geographies with the addition of new country versions, including Brazil, Chile, Colombia, Czech Republic, Greece, Hong Kong, Hungary, Israel, Malaysia, Mexico and Poland. This brings availability to 36 countries and regions.

European customers will be served their apps from a new data centre in Dublin and another in Amsterdam; Asian customers will be served from Microsoft's Singapore data centre and a newly built one in Hong Kong; while US customers will be served from from data centers in Texas, Virginia, Washington, and a newly built one in Chicago.