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March 18, 2008

Microsoft Convergence: The Good, The Bad and The Missing

Last week I attended my first Microsoft Convergence, the annual conference for users and partners involved with the business application side of Microsoft's business. Many small businesses still think of Microsoft has just providers of operating systems and office productivity software, but they go way beyond that with Dynamics line of apps that handle things like ERP, retail management and a few other things.....oh yeah, and CRM. I was attending as an analyst/press kind of person to check out what Microsoft has in store. So here are a few of my impressions from the three days I was in Orlando hanging out at the event.

The Good

  • Personal Stuff
    • The best part of any event always deals with people and this event was no different. It was great being a member of "The Gang of Four" for the time I was there. The Four being comprised of CRM gurus Paul Greenberg, Denis Pombriant and Marshall Lager...and me. It's always great seeing my buddy Paul, but it was also a pleasure to finally meet his lovely wife Yvonne. It had been about four years since I met Denis, so it was good catching up with him. And although I've enjoyed reading Marshall's stuff for a while, as well as having him on my radio show, I hadn't met him until last week. I'm glad that he's just as funny in person as he is in print.
    • Speaking of people who have been on my show that I had never met, here are a few more people I had a chance to finally meet:
      • Laurie McCabe of AMI Partners - Laurie was our first guest and has been a regular. She's about the only other University of Delaware grad I run across in the industry.
      • Sheryl Kingstone of Yankee Group - Sheryl was our second guest and member of CRM magazine's Hall of Fame
      • Rob Bois of AMR Research - Rob was a part of one of our most popular shows where we held a CRM round-table conversation with him, Marshall and 1to1 magazine's Ginger Conlon. Come to think of it, where were you Ginger???
      • Brad Wilson, Microsoft's GM of Dynamics CRM - Although I didn't get a chance to speak with Brad, I did check out one of his sessions, which I think was the best session I attended during the week
    • Denis Pombriant, who was responsible for naming Paul G. "the dean" of CRM, came up with a new nickname for Mr. Greenberg - the Walt Whitman of CRM. I'm told I'll have to read Leaves of Grass to really appreciate this one though.
  • Strong Commitment to CRM

It was easily apparent to anyone who attended the event that CRM is, and will be, a big focus of Microsoft. From Steve Ballmer's opening keynote right on through the rest of the conference, CRM was front and center. It appears to me that it's possibly the number one focus on the Dynamics side. That's not to say that other areas are being short changed, as ERP, business intelligence and other segments are also areas of focus. But I definitely got the sense that CRM is the center piece of what's going on. Which is pretty cool to see from my perspective.

It's also pretty apparent that Microsoft has spent a great deal of time making sure Dynamics CRM 4.0 looks a great deal like Outlook, which they hope will help smooth transitions and increase user adoption rates. I wrote about this before after getting a briefing I had a few months back with Bill Patterson, Sr. Product Director for Dynamics CRM. In fact there is some really nice integration with Word and Excel which should help the millions of Office users who live in those apps.

  • CRM the Way You Need It

As many of you know the 4.0 version of Dynamics CRM is being offered in three formats - on premise, hosted by Microsoft as "Software + Services" and hosted by Microsoft partners. Now at first I was kind of skeptical, as were many of the partners, as to why any customers would choose a third party vendor over Microsoft if they were looking for a hosted solution. But after thinking about it a bit this could be a good thing for both customers and partners. This could be the beginning of the long tail approach to CRM. The opportunities for third parties service providers to go beyond creating the traditional vertical offerings and create highly specialized niche offerings built off the Microsoft code-base could attract businesses with unique crm needs that do not want to manage, maintain and customize in house. This kind of plays up something Microsoft refers to as xRM - where other "relationship based" applications are being created from the Dynamics CRM app. So if partners can get past the fact that they may lose some of their traditional revenue streams, maybe they'll find they can create even more streams, which could possibly create deeper, longer lasting relationships. So it's all up to the partners to really make this a decidedly positive development.

  • Integrated Experiences

In the session on how Microsoft is (and will use) Dynamics CRM internally, they shared a few of the top needs identified by their own people with respect to using CRM software. Integrated experiences was among the top three needs, along with returning more time to users and... I know it will sound like a cliche, but... a need to have a 360 degree view of accounts. Maybe it was these internal needs that led to a focus on making it easier for CRM to play nice with their ERP apps, SharePoint portal software to share CRM data, access to data on Windows Mobile devices and use high end business intelligence tools to analyze performance. Ballmer also mentioned a new server product - Windows Essential Server - that will help make it easier for mid-size businesses to install and run Dynamics apps. It sounds like Small Business Server for the "M" in the smb crowd.

  • CRM and Football: Win-Win

The break out sessions I checked out were actually pretty good. Brad Wilson's session on customer choice had some nice demos showing the three flavors of CRM delivery, giving folks a look at how the on premise, partner hosted and Microsoft hosted solutions look and feel. He also had the Dallas Cowboy's head of technology, Pete Walsh, talk about how they are using CRM to manage customer experiences across all of their business units, which includes tickets, merchandising, luxury services and more. It was probably the most interesting case study of how someone was using Dynamics CRM I heard all week. I really hate saying that because I've hated the Cowboys ever since they knocked my beloved Los Angeles Rams out of the playoffs in the mid 70's when I was a little kid.

All in all the key here is that Microsoft knows how to make software, and now that they seem serious about CRM you can expect they will create compelling CRM offerings that can be delivered in formats customers can use to increase their opportunities of success.

The Bad

It's time for all technology companies to stop incorporating Star Wars themes into every trade show and conference they put together. I mean it's 2008 already, it's time to let it go. Give me some LOTR (Lord of the Rings), X-Men, or even Harry Potter, of which I've never read the books or rented the movies. At this point I'll take anything else, even rip-offs of Ishtar, Howard the Duck, or even (gasp) Soulplane. Anything but Star Wars...I'm begging you.

With that aside, on a more serious note I have to say what was really bad about the event has to do with what was missing.....

The Missing

Over the last few weeks I've been involved in Oracle's first ever CRM blogger's call , Sage's analyst call outlining their CRM strategy for the next two years, and Infusion Software's user conference. And without exception the main themes coming out of all three of these events is the growing importance of social CRM - how social media and web 2.0 tools are being incorporated into traditional crm strategies to reach their customers and prospects in a more meaningful way. In fact social CRM has very little to do with software, and everything to do with acknowledging that customers have the power to engage with whomever they want, whenever they want, wherever they want, however they want and how dramatically they wish to do so. So the masses can more easily amass without the boundaries of the past, and drive how they'll consume information as well as how they will do business. Which means that old maxim of business not being personal is no longer the case, if it ever was. Business IS very personal, so CRM has to be way more than great software, productivity gains and integration. These things are important, but so is understanding why people blog, leave comments, digg or stumble, create videos, etc.

So I was really surprised that I only heard the term web 2.0 mentioned once in the sessions and keynotes I sat in on during the three days I attended Microsoft Convergence. I was hoping to hear Steve Ballmer explain how Microsoft's investment in Facebook would play into their strategy for helping their customers build effective social marketing strategies. But I can't recall Facebook being mentioned at all, or LinkedIn, which I couldn't help think about as both Oracle and Sage are building links to these unbelievably popular sites AND business platforms into their CRM offerings.

And while there was an interesting demo of how you can manage Microsoft adCenter campaigns from within Dynamics CRM - what is being dubbed as keyword marketing services - I kept on thinking what about the ability to manage Google AdWords, which the vast majority of search engine marketers may be interested in. And why wouldn't they be interested as Google is still the tool of choice for finding things on the web. And that goes for those people who want easy Dynamics CRM access on iPhones and BlackBerrys. This last point I do believe there's something in the works, if I'm not mistaken.

Now I know Microsoft is in the process of trying to buy Yahoo!, but even if that goes through you can't ignore the hold Google has on the market, or expect folks to conform to what works best with your software, even if the software is good. It comes back to the philosophy of social CRM - participating in the conversation where the people are. They will value you more if you contribute to the conversation, and not try to take it over or force it where you want it to go. And that understanding of the social aspects of CRM is what seems to be missing here. The Dynamics CRM application looks to be solid, the choices for consuming it will work (I think), and enlisting local partners to lend expertise and support should really serve Microsoft well. Focusing on productivity, ease of integration and user adoption is also critical and looks to be well thought out and implemented. But it's just as critical to understand successful CRM initiatives need to go beyond the traditional areas of centralized databases and operational efficiencies. You have to understand how the web is transforming how customers and prospects want to communicate with your business. And that's more social than operational. Companies like Salesforce.com, Oracle and others are demonstrating their understanding of this. And it would have been great to see this on display at Convergence because Microsoft definitely has the capacity to compete in this area as well. I'm sure Microsoft understands all this, but it would have been great to hear it from them at this event.

All in all I was impressed with what went on at Convergence as it was a top notch, well run event. The exhibitor's area was great with a number of opportunities to check out all the different Dynamics apps. And a personal thanks to all the folks that made it easy for guys like me to concentrate on the event without having to worry about much of anything. However I can't help but think about how much better it might have been if Microsoft's business application side displayed their understanding of the social path we all seem to be on. Maybe that's coming at the next Convergence. I look forward to finding out.

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